At $77,357.61, Bitcoin may be poised for a downturn despite being slightly up. The cryptocurrency has gained less than 0.5% since midnight UTC, and any significant move towards $80,000 is likely to encounter 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 sell and take profits if the price surpasses that level. The upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may further weigh on the market. The recent Federal Reserve decision to maintain the federal funds rate, along with the significant number of dissenting voices, is also impacting market sentiment. Deans notes that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, respectively.
This suggests that tokens may move in tandem with levered Bitcoin trades. 'Conditions typically associated with rising volatility appear to be forming beneath the surface,' Deans observed. 'Liquidity remains subdued, with profit- and loss-taking largely offsetting each other, reflecting a lack of directional conviction.' In such environments, price movements are often necessary to unlock new liquidity.