The price of Bitcoin, currently at $78,313.84, may be due for a correction despite being slightly up. Gains have been 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 sell and take profits if the price moves above this level, thereby limiting any further advance.
The upcoming US March PCE inflation report, combined with high oil prices and rising bond yields, may also pose a challenge. The recent surge in West Texas Intermediate crude to $110 and reduced traffic through the Strait of Hormuz have kept energy markets volatile. Furthermore, the Federal Reserve's decision to maintain the federal funds rate, along with the notable dissent among its members, is weighing on the market. Deans noted 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 leveraged Bitcoin trades.
He also observed that conditions are forming that typically precede increased volatility, characterized by subdued liquidity and a lack of directional conviction, which may require significant price movements to unlock new liquidity.