The bitcoin price, currently at $78,975.64, is poised for a potential downturn despite its slight gains. 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 release of the US March PCE inflation report, coupled with high oil prices and rising bond yields, may exert downward pressure on risk assets. The recent surge in West Texas Intermediate crude to $110 and reduced traffic through the Strait of Hormuz have contributed to fragile energy markets.
The Federal Reserve's decision to maintain the federal funds rate, accompanied by four dissenting votes, has also impacted the market. Deans noted that altcoins remain closely tied to bitcoin, with a high correlation and beta percentiles of 97% and 99%, indicating that tokens may mirror bitcoin's price movements. He also observed that beneath the surface, conditions are forming that typically precede increased volatility, characterized by subdued liquidity and a lack of directional conviction, suggesting that significant price movements may be necessary to unlock new liquidity.