Although Bitcoin is currently trading at $79,740.66 with a slight increase, it may soon face a downturn. The cryptocurrency has seen less than a 0.5% gain since midnight UTC, and any significant move towards $80,000 is likely to meet 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 take profits and sell if the price surpasses this level, thereby limiting any potential advance. Furthermore, the release of the US March PCE inflation report, coupled with the current high oil prices and rising bond yields, may exert downward pressure on risk assets.
The recent surge in West Texas Intermediate crude to over $110 and reduced traffic through the Strait of Hormuz have kept energy markets volatile. The Federal Reserve's decision to maintain the federal funds rate, accompanied by an unusually high number of dissenting voices, has also contributed to the market's caution. Deans noted that altcoins continue to closely follow Bitcoin's movements, with a 180-day correlation and beta percentiles of nearly 97% and 99%, indicating that tokens may behave like leveraged Bitcoin trades.
He also observed that beneath the surface, conditions are forming that are typically associated with increased volatility, characterized by subdued liquidity and a lack of directional conviction, which may necessitate price movements to unlock new liquidity.