Bitcoin, currently trading at $78,317.47, may experience a setback despite its slight gains. The cryptocurrency has seen less than a 0.5% increase since midnight UTC, and any significant move towards $80,000 is 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 sell and take profits, thereby capping any potential advance. The upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may further exacerbate the situation. The recent Federal Reserve decision to maintain the federal funds rate has also had a negative impact on the market, with four dissenting voices calling for a rate cut or opposing the suggestion of future easing.
Deans notes that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, indicating that they may move in tandem with Bitcoin. He also warns that the current market conditions, characterized by subdued liquidity and a lack of directional conviction, may lead to increased volatility.