After reaching above $79,000, Bitcoin has pulled back to $76,500, halting its surge from late March's low of below $65,000. Those anticipating a quick rebound should note that recent economic data does not support a significant bullish move.
The University of Michigan's Survey of Consumers reported a record-low consumer sentiment index of 49.8, mainly driven by inflationary pressures related to the Iran conflict. Inflation expectations have also increased, with the one-year gauge rising to 4.8% in April, up from 3.8% the previous month.
Long-term expectations have reached 3.5%, the highest since October 2025. This surge in inflation expectations could limit the Federal Reserve's ability to signal interest-rate cuts, potentially capping gains in BTC and other risk assets.
Analysts warn that the long-term expectations move is particularly concerning for the Fed, as it raises the bar for any near-term easing pivot. The Fed is expected to maintain its benchmark interest rate between 3.5% and 3.75% this Wednesday. Meanwhile, traders are pricing in a potential Bank of Japan rate increase in June.
On the crypto side, sustained ETF inflows are crucial for supporting spot BTC on dips. Coordinated industry efforts to contain the KelpDAO exploit fallout have helped DeFi tokens perform better than the broader market.
The CoinDesk DeFi Select Index gained 0.5% over 24 hours, outperforming the CoinDesk 20's 1.5% decline.