The price of Bitcoin, currently at $79,854.07, may be due for a correction despite its slight gain. Having risen by 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 realize profits, thereby limiting any potential price increase. Furthermore, the upcoming US March PCE inflation report, coupled with high oil prices and rising bond yields, may exert downward pressure on risk assets. The recent Federal Reserve decision to maintain the federal funds rate, accompanied by an unprecedented number of dissenting voices, is also weighing on the market.
Deans noted that altcoins remain closely tied to Bitcoin, with a high correlation and beta percentile, indicating that they may mirror the price movements of Bitcoin. He also warned that underlying conditions are ripe for increased volatility, with subdued liquidity and a lack of directional conviction, suggesting that significant price movements may be necessary to unlock new liquidity.