Bitcoin's Rally Faces Hurdles as Economic Data Dampens Bullish Sentiment

After reaching above $79,000, Bitcoin has retreated to $76,500, stalling its upward momentum from late March's lows below $65,000. Recent economic indicators suggest that a rapid resurgence may not be imminent. The University of Michigan's Consumer Sentiment Index has plummeted to a record low of 49.8, driven primarily by inflation concerns linked to the Iran conflict. Furthermore, inflation expectations have surged, with the one-year gauge jumping to 4.8% in April from 3.8% the previous month, while long-term expectations have risen to 3.5%, the highest since October 2025. This sharp increase 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 shift in long-term expectations 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 also anticipating a potential Bank of Japan rate increase in June. On the crypto side, sustained ETF inflows are crucial for supporting spot BTC prices. Coordinated industry efforts have helped DeFi tokens hold up better than the broader market, with the CoinDesk DeFi Select Index gaining 0.5% over 24 hours. The technical analysis suggests that bitcoin's hourly price swings indicate uptrend exhaustion, with prices trading at a discount to their 50- and 200-hour averages, pointing to scope for a deeper price pullback.