Bitcoin, currently trading at $80,240.78 with minimal gains, may be poised for a downturn. The cryptocurrency has seen less than a 0.5% increase since midnight UTC, and any significant push 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 if the price surpasses this level, thereby capping any potential advance. The upcoming U.S.
March PCE inflation report, coupled with the pressure of high oil prices on risk assets, may further hinder Bitcoin's progress. The recent surge in West Texas Intermediate crude to $110 and reduced traffic through the Strait of Hormuz have contributed to the fragility of energy markets. The Federal Reserve's decision to maintain the federal funds rate, accompanied by four dissenting votes - the most since 1992 - has also had a dampening effect on the market. Deans noted that altcoins remain closely tied to Bitcoin, with a 180-day correlation and beta percentiles nearing 97% and 99%, suggesting that tokens may behave like leveraged Bitcoin trades.
"Underlying conditions that typically precede rising volatility appear to be forming," Deans stated. "Liquidity remains subdued, with profit and loss taking largely offsetting each other, indicating a lack of directional conviction." In such environments, price movements are often necessary to unlock new liquidity.