Bitcoin, currently trading at $78,276.05 with minimal gains, may experience a significant correction. The cryptocurrency has seen less than a 0.5% increase since midnight UTC, and any substantial move towards $80,000 is likely to encounter 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 realize profits and sell, thereby limiting any potential advance. The release of the US March PCE inflation report, coupled with soaring oil prices, may further exacerbate the situation. The recent decision by the Federal Reserve to maintain the federal funds rate, accompanied by four dissenting votes, has also contributed to market uncertainty. Deans noted that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, respectively.
This suggests that altcoins may exhibit amplified movements similar to Bitcoin trades. Deans warned that beneath the surface, conditions are ripe for increasing volatility, characterized by subdued liquidity and a lack of directional conviction, which may necessitate significant price movements to unlock new liquidity.