Bitcoin, currently trading at $77,983.07, may be poised for a downturn despite being slightly up. The cryptocurrency has seen minimal gains of less than 0.5% since midnight UTC, and significant moves towards $80,000 are 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 take profits and sell if the price surpasses this level, thereby limiting any potential gains. Additionally, the upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may exert downward pressure on the market.
The recent Federal Reserve decision to maintain the federal funds rate, accompanied by four dissenting voices, has also contributed to market uncertainty. Deans noted that altcoins continue to be closely tied to Bitcoin, with a high correlation and beta percentile, indicating that they may move in tandem with Bitcoin. He also warned that underlying conditions are ripe for increased volatility, characterized by subdued liquidity and a lack of directional conviction, which may require significant price movements to unlock new liquidity. Furthermore, derivatives positioning suggests a cautious outlook, with market participants exhibiting risk aversion.