The price of Bitcoin, currently at $78,133.76, may be poised for a downturn despite being slightly up. Having gained less than 0.5% since midnight UTC, any significant push 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 realize profits if the price surpasses this level, thereby capping any potential advance. Furthermore, the upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may exert additional downward pressure on the cryptocurrency.
The recent decision by the Federal Reserve to maintain the federal funds rate, along with the significant number of dissenting voices, has also contributed to market uncertainty. Deans noted that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentiles of approximately 97% and 99%, indicating that they may mimic the movements of Bitcoin. He also observed that market conditions are ripe for increased volatility, with subdued liquidity and a lack of directional conviction, suggesting that price movements may be necessary to unlock new liquidity.