The current price of Bitcoin, at $78,208.61, may experience a significant downturn despite its slight gains. The cryptocurrency has seen less than a 0.5% increase since midnight UTC, and any attempts to reach $80,000 are likely to 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 may prompt them to sell and take profits, limiting any potential price increase.
Furthermore, the upcoming US March PCE inflation report, combined with high oil prices and rising bond yields, is expected to weigh on risk assets. The recent decision by the Federal Reserve to maintain the federal funds rate has also had a negative impact on the market, with four dissenting voices, the most since 1992, and one governor advocating for a rate cut. Deans noted that altcoins are still closely tied to Bitcoin, with a 180-day correlation and beta percentiles of approximately 97% and 99%, indicating that tokens may move in tandem with leveraged Bitcoin trades.
He also stated 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 require significant price movements to unlock new liquidity.