The value of Bitcoin, currently at $79,099.61, may be due for a correction despite its slight increase. The cryptocurrency has seen less than a 0.5% gain 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, limiting 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, along with the surge in West Texas Intermediate crude prices, is also weighing on the market.
Deans notes that altcoins are closely tied to Bitcoin, with a high correlation and beta percentile, indicating that tokens may move in tandem with Bitcoin. He also warns that beneath the surface, conditions are forming that could lead to increased volatility, with liquidity remaining subdued and profit- and loss-taking offsetting each other, reflecting a lack of directional conviction.