Bitcoin’s rebound from its mid-March lows has led the cryptocurrency to climb up towards $8,000 – a price point that is proving to be a major resistance level for BTC.
This resistance has led the crypto to face multiple harsh rejections here, although buyers have remained largely unphased due to the strength of this recent uptrend.
It is important to note that on-chain analysis indicates that breaking above $8,000 may prove to be a greater challenge than it seems for Bitcoin bulls, as 1.5 million wallets acquired their crypto at this price.
This could mean that some of these investors who were scared by the recent capitulatory decline will be apt to offload their crypto holdings at a breakeven, making this price point a potentially significant supply zone for Bitcoin.
Bitcoin Quickly Approaches Potential Supply Zone as Bulls Build Momentum
At the time of writing, Bitcoin is trading up just under 2% at its current price of $7,710, marking a slight decline from daily highs of roughly $7,800 that were set earlier today.
BTC has faced multiple rejections around its current price level throughout the past couple of days, although bulls haven’t been phased by this normally bearish trend.
The $8,000 level that buyers are attempting to recapture could prove to be difficult to surmount, as a significant number of investors who bought BTC at $8,000 before the March crash to $3,800 may now be itching to sell at a breakeven.
Data from analytics platform IntoTheBlock shows that this is a real possibility that traders should watch for.
“Bitcoin price reaches $7,700. Using our IOMAP indicator, we see that there are close to 1.5mm addresses that could push back on Bitcoin getting passed $8,000. Looking at the levels of support, $7500 looks like it could hold strong with 1.17mm addresses holding almost 830k,” they noted.
Image Courtesy of IntoTheBlock
Technical Analysis Supports Notion that $8,000 Could Spark an Intense BTC Selloff
Per a report from NewsBTC yesterday, some traders have also noted that they anticipate Bitcoin to reach the $8,000 level in the days ahead, subsequently facing a harsh rejection here that leads it to “nuke” lower.
“BTC – Nothing has changed. Will most likely be adding to my long tomorrow. This nuke gonna be juicy,” one trader noted while pointing to the below chart showing a short-term upside target at $8,000.
Image Courtesy of Mac
The confluence of technical weakness and massive overhead supply at $8,000 makes it unlikely that Bitcoin will successfully surmount this level in the near-term.
Featured image from Unplash.