The current price of Bitcoin, at $76,475.74, may be poised for a correction. Despite being slightly up, the largest cryptocurrency has only gained less than 0.5% since midnight UTC and is likely to face opposition as it approaches $80,000.
According to Luke Deans, a senior research associate at Bitwise, short-term holders have a cost basis around $80,000, which could prompt them to take profits and sell, thereby limiting any potential advance. The upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may further contribute to this resistance. The recent Federal Reserve decision to maintain the federal funds rate, accompanied by four dissenting voices, has also added to market uncertainty.
Deans notes that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, respectively. This suggests that altcoins may mimic the performance of levered Bitcoin trades. Deans also observes that market conditions are ripe for increasing volatility, characterized by subdued liquidity and a lack of directional conviction, which may necessitate price movements to unlock new liquidity.