Bitcoin Faces Profit-Taking Pressure Near $80,000 Amid Rising Bond Yields and Inflation Concerns

Bitcoin's recent gains may be short-lived as the cryptocurrency faces profit-taking pressure near the $80,000 mark. This comes as the US inflation data is set to be released, with high oil prices and rising bond yields weighing on risk assets.

According to Luke Deans, a senior research associate at Bitwise, short-term holders have a cost basis around $80,000, which may convince them to take profits and sell, capping any advance. This is especially true given the recent surge in oil prices, with West Texas Intermediate crude reaching as high as $110.

Derivatives positioning also suggests a risk-averse market, with futures open interest dropping over 2% to $119 billion in 24 hours. Trading volumes, however, have increased 26% to $208 billion, indicating that positions are being closed and capital is fleeing the market.

The combination of these factors suggests that Bitcoin may face a shock in the coming days, with the 30-day implied volatility index dropping to 41% and ether's volatility index showing a similar pattern. The large concentration of open interest in Bitcoin's $80,000 call has also created long gamma dynamics, suggesting that market makers may sell rallies into and above that level to hedge their books.