Bitcoin , while it's slightly in the green may be in for a shock. The largest cryptocurrency has gained less than 0.5% since midnight UTC, and strong moves toward $80,000 are likely to run into opposition.
That's because short-term holders have a cost basis around that price, Luke Deans, a senior research associate at Bitwise, told CoinDesk. A move above may convince them to take profits and sell, capping any advance.
Another headwind may present itself in the form of U.S. March PCE inflation, which lands as oil prices keep pressure on risk assets. West Texas Intermediate crude has surged to as high as $110, and reduced traffic through the Strait of Hormuz has kept energy markets fragile.
Wednesday's Federal Reserve decision to hold the federal funds rate steady is also weighing on the market. Specifically, a whopping four dissenting voices, the most since 1992, with one governor pushing for a cut and three regional presidents opposing the statement's suggestion that the Fed would resume easing.
Deans also said altcoins remain tied to bitcoin, with the 180-day correlation and beta percentiles near 97% and 99%. That means tokens may move like levered bitcoin trades today.
“Beneath the surface, conditions typically associated with rising volatility appear to be forming,” Deans said. “Liquidity remains subdued, with profit- and loss-taking largely offsetting each other, reflecting a lack of directional conviction.”
In these environments, he said, price moves are often needed to unlock new liquidity.