The value of Bitcoin, currently at $78,338.86, may be due 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 be met with 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 sell and take profits if the price moves above this point, thereby limiting any potential gains.
The upcoming US March PCE inflation report, coupled with the current 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 made energy markets more fragile.
Furthermore, the Federal Reserve's decision to maintain the federal funds rate, along with the notable dissent among its members, is also impacting the market. Deans noted that altcoins are closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99% over 180 days, indicating that they may move in tandem with Bitcoin.
He also observed that beneath the surface, conditions that typically precede increased volatility appear to be forming, characterized by subdued liquidity and a lack of directional conviction, which may necessitate price movements to unlock new liquidity.