The price of Bitcoin, currently at $77,044.56, may be poised for a downturn despite its slight gains. The cryptocurrency has seen less than a 0.5% increase since midnight UTC, and any significant moves towards $80,000 are likely to face opposition.
According to Luke Deans, a senior research associate at Bitwise, short-term holders have a cost basis around $80,000, which may prompt them to take profits and sell if the price surpasses this level, thereby limiting any potential gains. Furthermore, the upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may also hinder the cryptocurrency's progress.
The recent decision by the Federal Reserve to maintain the federal funds rate, along with the significant number of dissenting voices, has added to the market's uncertainty. Deans noted that altcoins continue to be closely tied to Bitcoin, with a high correlation and beta percentiles of approximately 97% and 99%, indicating that these tokens may behave like leveraged Bitcoin trades. Deans cautioned that beneath the surface, conditions are forming that are typically associated with increased volatility, characterized by subdued liquidity and a lack of directional conviction, which may necessitate price movements to unlock new liquidity.