Bitcoin repeatedly frustrated at the threshold of $80,000… Due to a supply bomb of 470,000 units?

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Bitcoin (BTC), the leading cryptocurrency, is repeatedly frustrated at the formidable barrier of $80,000, causing market exasperation. Beyond a mere psychological resistance level, Bitcoin is navigating a precarious tightrope walk in the face of a harsh reality brought about by an unprecedented, mathematically calculated supply bomb and the exodus of institutional funds.

According to the investment media outlet TradingNews on April 30 (local time), Bitcoin has fallen by 0.29% over the past 24 hours, trading at $76,316. It hovered between an intraday low of $74,959 and a high of $77,846, making several attempts to reach the $80,000 mark, but all were in vain. This represents an 18.98% decrease compared to the $94,198 recorded this time last year, but a significant 27% surge from its February low in just two and a half months.

The most decisive reason Bitcoin cannot cross the $80,000 threshold is the so-called "break-even psychology" at play, leading to a problematic supply zone. On-chain data analysis revealed that a staggering 475,301 Bitcoins were purchased in the $77,800 to $80,880 range. Each time the price reaches this zone, investors, weary from a prolonged bear market, offload their holdings to recover their principal. On April 15, realized profits for short-term holders surged to $7.2 million per hour, demonstrating strong selling pressure.

Adding to this, even the spot Exchange Traded Fund (ETF) market, which had been a strong supporter, has turned its back, draining upward momentum. A total of $390 million has flowed out of US spot Bitcoin funds for three consecutive days recently. This marks the longest outflow period since March 20, suggesting that the buying interest from institutional investors, which had previously overwhelmed the mere 450 Bitcoins mined daily and driven price increases, is now cooling. With fund demand reversing, Bitcoin's price has lost its robust defense and is now being tested at support levels.

However, glimmers of a potential reversal are visible in the derivatives market and the movements of large whales. The funding rate for perpetual futures has turned negative (-0.0087%), creating an unusual situation where short positions are paying long positions. With Open Interest reaching 2,799.7 units, if the price surpasses $78,000, a massive short squeeze (buying pressure generated to liquidate or cover short positions) could occur, leading to an explosive surge towards $80,000. Furthermore, signs of large-scale accumulation by futures market whales around $75,000 indicate that a strong support level is being built to defend against declines.

Experts unanimously agree that Bitcoin is likely to trade sideways in a narrow range between $73,000 and $78,000 over the next 30 to 60 days. Currently, a conservative approach of dollar-cost averaging around $74,000 is considered valid, and aggressive buying should only be considered after decisively breaking through the problematic supply zone and firmly surpassing $78,000. If the $73,800 support level collapses due to macroeconomic headwinds or other factors, a deep bear market, potentially sliding to the low $60,000s, is likely unavoidable.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*