Bitcoin is currently trading at $78,453.96, showing a slight increase, but it may be heading for a downturn. The cryptocurrency has seen less than a 0.5% gain 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 could prompt them to take profits and sell if the price surpasses that level, thereby capping any potential advance. Furthermore, the US March PCE inflation report, coupled with high oil prices and rising bond yields, may exert downward pressure on risk assets. The recent decision by the Federal Reserve to maintain the federal funds rate has also contributed to market uncertainty, with four dissenting voices, the most since 1992, and reduced traffic through the Strait of Hormuz keeping energy markets volatile. Deans noted that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentile, indicating that tokens may move in tandem with Bitcoin.
He also stated that 'beneath the surface, conditions typically associated with rising volatility appear to be forming,' with liquidity remaining subdued and profit- and loss-taking offsetting each other, reflecting a lack of directional conviction. In such environments, price movements are often necessary to unlock new liquidity.