Bitcoin, currently trading at $77,964.50 with minimal gains, may be poised for a correction. The cryptocurrency's less than 0.5% increase since midnight UTC suggests that attempts to reach $80,000 could be met with 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 the price advance. The release of the US March PCE inflation report, coupled with soaring oil prices and rising bond yields, may further contribute to the headwinds facing the market.
The recent Federal Reserve decision to maintain the federal funds rate, accompanied by an unusually high number of dissenting voices, is also exerting downward pressure. Deans notes that altcoins remain closely tied to bitcoin, with a high correlation and beta percentile, indicating that they may exhibit leveraged movements similar to bitcoin. He also warns that beneath the surface, conditions are ripe for rising volatility, with subdued liquidity and a lack of directional conviction, which may necessitate significant price movements to unlock new liquidity.