With Bitcoin currently trading at $76,119.97, showing a slight gain, it may soon face a significant test. Having gained less than 0.5% since midnight UTC, any strong push towards $80,000 is expected to encounter resistance.
According to Luke Deans, a senior research associate at Bitwise, short-term holders have a cost basis around $80,000, and a move above this level could prompt them to sell and take profits, thus capping any potential advance. The upcoming U.S. March PCE inflation report, coupled with high oil prices and rising bond yields, may further exacerbate this trend.
The recent surge in West Texas Intermediate crude to $110 and reduced traffic through the Strait of Hormuz have kept energy markets on edge. The Federal Reserve's decision to maintain the federal funds rate, along with dissenting voices, has added to market uncertainty. Deans also noted that altcoins remain closely tied to Bitcoin, with high correlation and beta percentiles, indicating that tokens may move in tandem with levered Bitcoin trades. He cautioned that beneath the surface, conditions are forming that typically precede rising volatility, characterized by subdued liquidity and a lack of directional conviction, suggesting that significant price moves may be necessary to unlock new liquidity.