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

▲ Bitcoin (BTC) ©CoinReaders

Bitcoin (BTC), the leading virtual asset, is repeatedly facing frustration at the formidable barrier of $80,000, creating a sense of exasperation in the market. Beyond a simple psychological resistance level, Bitcoin is treading a precarious tightrope in the face of a harsh reality brought about by a mathematically calculated, unprecedented supply 'bomb' and the outflow 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 breach 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 27% surge in just two and a half months compared to its February low.

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

Furthermore, even the spot Exchange-Traded Fund (ETF) market, which was a strong supporter, has turned its back, robbing Bitcoin of its upward momentum. A total of $390 million has flowed out of US spot Bitcoin funds for three consecutive days recently. This is the longest period of outflows since March 20, suggesting that the buying interest from institutional investors, which had previously driven price increases by overwhelming the daily mining supply of only 450 Bitcoins, is cooling down. With fund demand reversing, Bitcoin's price has lost its strong defense and is now testing support levels.

However, a glimmer of reversal is 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 rise towards $80,000. Furthermore, the detection of large-scale accumulation by futures market whales around $75,000 indicates that strong support is being built to defend against declines.

Experts unanimously agree that Bitcoin is likely to trade sideways within a narrow range of $73,000 to $78,000 over the next 30 to 60 days. For now, a conservative approach of dollar-cost averaging around $74,000 is advisable, and aggressive buying should only be considered after decisively breaking through the problematic supply zone and surpassing $78,000. If the $73,800 support level collapses due to macroeconomic headwinds or other factors, a steep decline into the low $60,000s will be difficult to avoid.

*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.*