With Bitcoin currently trading at $77,236.71 and showing a slight increase, it may soon experience a downturn. Having gained less than 0.5% since midnight UTC, any significant push towards $80,000 is expected to meet resistance.
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 sell and realize profits, thereby limiting any potential advance. Additionally, the upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may pose another obstacle for Bitcoin.
The recent surge in West Texas Intermediate crude to $110 and reduced traffic through the Strait of Hormuz have also kept energy markets on edge. The Federal Reserve's decision to maintain the federal funds rate, along with the notable dissent among its members, is further impacting the market.
Deans notes that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, indicating that tokens may behave like leveraged Bitcoin trades. He also warns that beneath the surface, conditions are forming that typically precede increased volatility, with subdued liquidity and a lack of directional conviction. In such environments, significant price movements are often necessary to unlock new liquidity.