Bitcoin (CRYPTO: BTC) has faced resistance, remaining below the $80,000 mark for the past three months. Each attempt to breach this key level has been thwarted, with BTC consistently retracting whenever it surpasses $79,000. However, in the early hours in Singapore today, this barrier was finally overcome as BTC broke through the $80K threshold, reaching $80,500—its peak since the onset of tensions between the U.S. and Iran.
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Bitcoin (CRYPTO: BTC) has been experiencing a steady decline below the vital $80,000 mark for three months now. Despite several attempts to reach the $80K level, each has been met with rejection, causing BTC to dip whenever it crosses $79,000. Early today in Singapore, however, the long-standing resistance at $80K was overcome, as BTC surged to $80,500—marking its highest point since the U.S. and Iran tensions escalated.
Following Trump’s rejection of Iran’s peace proposal late Sunday, he introduced “Project Freedom”—a military initiative aimed at guiding stranded vessels through the Strait of Hormuz, which commenced Monday morning local time. This decision led to a drop in Brent crude prices from last Thursday’s high of $126 to around $107, alleviating some strain on the cryptocurrency market.
Although Bitcoin has since retreated to $79,500, the critical question remains: can BTC sustain itself above the $80,000 level?
Bitcoin Surpasses $80,000 After Trump’s Response to Iran
Trump announced on Truth Social that the U.S. would initiate “Project Freedom” on Monday morning, which involves deploying around 15,000 troops and over 100 aircraft to escort trapped merchant vessels through the Strait of Hormuz. This news was perceived as a decisive U.S. effort to lift the blockade that has disrupted 20% of the world’s oil supply since the conflict began.
As the Asian market opened, Bitcoin broke through the $80,000 level. It hit $80,529 in the early hours in Singapore today, May 4. Meanwhile, Brent crude prices—which soared to $126 last Thursday—settled near $107.
Bitcoin’s ascent led to significant losses for short sellers. Approximately $303 million in short positions were liquidated within a 24-hour period, with $108 million wiped out in a single hour as BTC maintained its position above $80,000. Traders had heavily bet against this breakout, and once the $80K barrier was breached, they were compelled to re-enter the market.
Currently, Bitcoin’s price has retreated to $79,500 as the momentum has softened. However, for the first time in three months, BTC is trading above $80,000.
Bitcoin Reaches $80,000, But Caution Is Warranted
This marks the first instance where Bitcoin has exceeded $80,000 since late January. However, merely hitting this price isn’t the only significant indicator. By surpassing the $80K threshold, BTC not only reclaimed its bullish support band but also signaled a shift in market sentiment—traditionally viewed as pivotal for determining bullish or bearish trends.
This support band has thwarted previous recovery efforts over recent months, with the last four attempts all falling short of $79,000 and well below this crucial band. Achieving a close above it now signifies a structural change that has been lacking in previous months.
Furthermore, by breaking above $80,000, Bitcoin has also surpassed the True Market Mean—the average cost basis for BTC holders. This ensures that those who purchased in the last six months now break even, alleviating some of the “sell the rally” pressure that has historically weighed down BTC attempts to rise.
However, there’s an important caveat. According to CryptoQuant’s April analysis, the rally from $66,000 to $79,000 was primarily fueled by demand for perpetual futures, while spot buying decreased throughout that month. This upward trend relied more on leverage than on substantial buying activity in the spot market.
A similar scenario played out at the onset of the 2022 bear market, leading to an extended downturn. CryptoQuant’s Bull Score Index saw a drop from 50 to 40 in April, indicating a shift from neutral to bearish sentiment. Without a positive shift in spot demand within the next few weeks, leveraged traders may exit their positions, bringing BTC back down to the $75,000–$77,000 range.
Bitcoin Price Forecast for the Remainder of May
The Bitcoin price could take one of three potential paths, depending on the level of support from bullish traders.
Bullish Prediction: $85,000–$100,000
If BTC manages to close above $82,000—which corresponds with the 200-day moving average—this would indicate a break in the longer-term downtrend. This scenario would position the $85,000 to $88,000 range as the next point of resistance, with $100,000 as a long-term goal.
Achieving this would require continued inflows into Bitcoin ETFs following Friday’s inflow of $630 million, as well as an ongoing resolution of tensions in Iran, and movement on the CLARITY Act in the Senate. With many traders currently shorting this rally, a decisive move above $82,000 could force them to buy back in at higher prices, further driving the ascent.
Base Prediction: $78,000–$83,500 Range
The base scenario seems to be the most probable, as indicated by Polymarket traders. They estimate a 47% likelihood of BTC reaching $85,000 by the end of the month, but only a 21% chance of exceeding $90,000. This suggests that BTC may hover in the $78,000 to $83,500 range during May, edging close to $82,000 multiple times without securing a breakthrough.
Since the preceding rally in April was primarily driven by leverage rather than genuine buying interest, this scenario aligns. Once the short squeeze completes, a lack of fresh demand could hinder the BTC price from moving higher.
Bearish Prediction: $66,000–$73,500
Conversely, if BTC encounters resistance at $80,000 and the funding rate for perpetual futures turns negative, it could lead to significant downturns. A negative funding rate indicates that traders are incurring costs to maintain their long positions, leading many to exit.
The first level of support would likely be $75,000, followed by $73,500, which corresponds to the 50-day moving average. Should it drop below $73,500, BTC could plummet to $66,000, as there would be minimal support, particularly if discussions with Iran falter or oil prices surge back towards $130, or if ETF inflows reverse.
The Next 72 Hours Are Critical for Bitcoin’s Stability Above $80,000
Bitcoin’s recent breakthrough above $80K is still in a fragile state; the upcoming 24 to 72 hours will likely reveal if BTC can maintain this position. On-chain data indicates that much of the current momentum is driven by leverage, so an increase in spot demand is essential for validating this upward move. If Bitcoin can establish itself above $80,000, there’s a closed CME futures gap at $84,500 that has demonstrated significant attraction throughout the year, and a sustained advance could draw BTC toward that level.
Two key factors will determine Bitcoin’s trajectory from this point forward. The first is the funding rate for perpetual contracts—should it turn negative as BTC nears $82,000, it would signify a loss of momentum. The second is the flow of ETF-related investments on Monday and Tuesday. If the inflows from late last week persist, BTC could receive the real demand needed to maintain its $80K position. Conversely, if these inflows diminish, today’s breakout could be regarded as a false start.
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