Bitcoin's Stalled Breakout: Is $84K the Next Key Support?

Bitcoin's price action in December 2025 has painted a complex narrative of resilience and fragility. After a volatile correction from record highs, the cryptocurrency is now consolidating near the $84,000–$85,000 support level, a zone historically associated with strong buying interest. Technical and on-chain indicators suggest a tug-of-war between capitulation and accumulation, with critical implications for the asset's near-term trajectory.

Technical Indicators: A Mixed Signal

On the 4-hour chart, Bitcoin has formed a descending trendline from highs above $100,000, now consolidating in a corrective phase. The Relative Strength Index (RSI) currently sits at 50.06, indicating a neutral market state. However, a bullish divergence on the daily RSI-a sign of seller exhaustion-has emerged, hinting at potential trend reversal. This divergence, coupled with a bullish imbalance candle and a "change in character" pattern, suggests buyers may be stepping in to defend the $84K level.

Candlestick patterns, however, remain contradictory. A local bear flag in the $78,000–$80,000 range implies short-term bearish continuation, while a break above $88,000 could trigger a push toward $92,000. The Moving Average Convergence Divergence (MACD) on 4H and 1H timeframes will be critical in confirming the trend's direction. A daily close above $90,200 could spark a bullish short squeeze, targeting $93,400–$94,000, whereas a failure to hold $84K risks a drop to $76,000 or even $68,500.

On-Chain Metrics: Capitulation or Accumulation?

On-chain data reveals a nuanced picture of market behavior. Realized losses-a key indicator of structural seller exhaustion-have declined by approximately 80% since November, suggesting weak hands have been largely absorbed. This drop in selling pressure aligns with a broader stabilization phase, as the net realized profit/loss metric improved by nearly half in late December.

Large holder activity, however, remains mixed. While mid-December saw a spike in transactions exceeding $1 million, these moves were isolated and did not extend to the $100k+ tier. Meanwhile, the percentage of Bitcoin supply on exchanges rose slightly to 6.12%, raising concerns about increased sell-side pressure. Notably, long-term holder (LTH) supply fell to 14.34 million BTC by December 2025-the lowest level since May-indicating a third wave of LTH selling absorbed by ETFs and corporate treasuries.

At the $84K support level, UTXO activity suggests accumulation is occurring during pullbacks. Yet this is counterbalanced by year-end tax loss harvesting, which drove $825 million in institutional outflows from U.S. spot Bitcoin ETFs. Active Bitcoin addresses have also declined sharply, signaling fading on-chain OTC activity and reduced market participation.

The Fragile Equilibrium

Bitcoin's current position reflects a fragile equilibrium. While patient buyers appear to be holding the price above the True Market Mean of $81.3K, overhead supply from the $93K–$120K range continues to cap upward movement. The STH realized profit/loss ratio has collapsed to 0.07x, highlighting weakened liquidity and demand. Meanwhile, Bitcoin's apparent demand has been negative since late November, underscoring insufficient new demand to offset supply from miners and LTHs.

The market's ability to absorb massive sales-such as the $9 billion liquidation from a Satoshi-era investor in mid-December-demonstrates institutional resilience. However, this resilience has not translated into sustained accumulation, leaving Bitcoin stuck in a high-beta risk asset role amid geopolitical uncertainty and gold's elevated demand.

Implications for Investors

For investors, the $84K level represents a critical inflection point. A successful defense could reignite bullish momentum, with $90K and $94K as near-term targets. Conversely, a breakdown below $84K may trigger a retest of $76K or $68.5K, testing the depth of buyer support. On-chain metrics suggest structural seller exhaustion, but the absence of robust accumulation from large holders and ETFs remains a concern.

In the longer term, global M2 reaching all-time highs offers a cautiously bullish backdrop for 2026. Yet for now, Bitcoin's stalled breakout underscores the market's struggle to balance capitulation and accumulation-a dynamic that will define its next phase.