Bitcoin's Ascent to $80,000 Faces Hurdles Amid Economic Uncertainty

After reaching above $79,000 earlier in the week, Bitcoin has retreated to around $76,500, pausing its rally from the late-March lows below $65,000. However, recent economic data suggests that a rapid recovery may not be imminent. The University of Michigan's Consumer Sentiment Index has fallen to a record low of 49.8, primarily driven by inflation concerns related to the Iran conflict. Inflation expectations have also increased significantly, with the one-year gauge rising to 4.8% in April, up from 3.8% the previous month. The long-term expectations have reached 3.5%, the highest level since October 2025. This surge in inflation expectations could limit the Federal Reserve's ability to implement interest-rate cuts or liquidity easing, potentially capping the upside for Bitcoin and other risk assets. Analysts warn that the sharp rise in long-term expectations is particularly concerning for the Federal Reserve, as it may indicate that inflation psychology is becoming unanchored. The Fed is expected to maintain its benchmark interest rate between 3.5% and 3.75% this Wednesday. Meanwhile, traders are also anticipating a potential rate increase by the Bank of Japan in June. On the cryptocurrency front, sustained ETF inflows are crucial for supporting Bitcoin prices. Coordinated efforts to mitigate the impact of the KelpDAO exploit have helped DeFi tokens perform relatively well, with the CoinDesk DeFi Select Index gaining 0.5% over 24 hours. However, Bitcoin's hourly price chart shows that it has broken out of an ascending trendline, and prices are trading below their 50- and 200-hour averages, indicating potential for a deeper price pullback.