The value of Bitcoin, currently at $78,344.51, may be poised for a downturn despite its slight gains. The cryptocurrency has seen less than a 0.5% increase since midnight UTC, and any significant moves towards $80,000 are 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 may prompt them to sell and realize profits, thereby limiting any potential gains.
Furthermore, the upcoming 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, accompanied by four dissenting votes, has also contributed to market uncertainty. Deans notes that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, respectively, indicating that they may behave like leveraged Bitcoin trades.
He also observes that beneath the surface, conditions are ripe for increased volatility, characterized by subdued liquidity and a lack of directional conviction, which may necessitate price movements to unlock new liquidity.