The value of Bitcoin, currently at $79,707.35, may experience a downturn despite its slight increase. Having gained less than 0.5% since midnight UTC, the cryptocurrency is likely to encounter opposition as it approaches $80,000. According to Luke Deans, a senior research associate at Bitwise, short-term holders have a cost basis around $80,000, which may prompt them to sell and take profits, thereby limiting any further gains.
The upcoming US March PCE inflation report, combined with high oil prices and rising bond yields, may also hinder Bitcoin's progress. The recent decision by the Federal Reserve to maintain the federal funds rate, along with the significant number of dissenting voices, has added to market uncertainty. Deans notes that altcoins are closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, indicating that they may move in tandem with Bitcoin.
He also observes that market 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.