The price of Bitcoin, currently at $80,685.16, may be due for a correction, despite being slightly up. The cryptocurrency has seen minimal gains of less than 0.5% since midnight UTC, and any significant moves towards $80,000 are likely to meet resistance.
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 if the price surpasses this level, thereby limiting any potential gains. Furthermore, the upcoming US March PCE inflation report, combined with high oil prices and rising bond yields, may exert downward pressure on risk assets. The recent decision by the Federal Reserve to maintain the federal funds rate, along with the significant number of dissenting voices, has also contributed to market uncertainty. Deans noted that altcoins are closely tied to Bitcoin, with a high correlation and beta percentiles of 97% and 99%, indicating that they may behave like leveraged Bitcoin trades.
He also stated that beneath the surface, conditions are forming that typically precede increased volatility, characterized by subdued liquidity and a lack of directional conviction, which may require significant price movements to unlock new liquidity.