The value of Bitcoin, currently at $80,893.49, may be poised for a downturn despite its slight gains. Having risen by less than 0.5% since midnight UTC, any significant move towards $80,000 is expected to meet with resistance.
According to Luke Deans, a senior research associate at Bitwise, short-term holders have a cost basis around $80,000, which could lead 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, coupled with high oil prices and rising bond yields, may also hinder the cryptocurrency's progress. The recent surge in West Texas Intermediate crude to $110 and reduced traffic through the Strait of Hormuz have kept energy markets on edge.
The Federal Reserve's decision to maintain the federal funds rate, accompanied by four dissenting voices, has also contributed to market uncertainty. Deans notes that altcoins remain 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 observes that conditions typically associated with increased volatility are emerging, characterized by subdued liquidity and a lack of directional conviction, suggesting that price movements may be necessary to unlock new liquidity.