Yes, everything else what references a material has to be archived before you can archive a material.
Setting a deletion indicator is a preparation work for archiving. the record stays in the database, the deletion indicator can be removed at any time.
Instead of deletion indicator SAP should have named it "archiving proposal indicator" then we had less misunderstandings.
Of course the discussion forums are made for knowledge exchange, but we do not need to exchange knowledge which is public accessable and should be basis for professional discussions in the forum.
Honestly it is boring to answer everyday the same question. And it does not help you or any other who wants to search if you find 1000 or 2000 discussions about the same thing. All this basic stuff actually hides the good discussions with valuable content that cannot be found in help.sap.com documentation.
The experience even shows that knowledgable people do less participate in SCN because the quality drops with all the basic questions, and more and more wrong answers are given on complex questions. So you are actually hurting yourself by asking the basic stuff for which you could find the answer by research and documentation, once you know all the basics and have real sophisticated questions then you stay alone and nobody is around to answer it, or you have to trust the misleading answers...