Bitcoin Faces Hurdles in Regaining $80,000 as Macro Factors Intervene

After peaking above $79,000, Bitcoin has retreated to $76,500, halting its rally from late March's lows below $65,000. Recent economic indicators suggest a cautious approach, rather than an immediate return to a bullish trend. The University of Michigan's consumer sentiment index has dropped to a record low of 49.8, driven largely by inflation concerns related to the Iran conflict. Furthermore, inflation expectations have risen, with the one-year gauge surging to 4.8% in April, and long-term expectations reaching 3.5%, the highest since October 2025. These rising inflation expectations could limit the Federal Reserve's ability to signal interest rate cuts, potentially capping the upside for Bitcoin and other risk assets. Analysts note that the long-term expectations shift is particularly concerning for the Fed, as it indicates inflation psychology may be becoming unanchored. The Fed is expected to maintain its benchmark interest rate, and traders are also anticipating a potential rate increase by the Bank of Japan in June. Meanwhile, sustained ETF inflows are crucial for supporting Bitcoin's price, and coordinated industry efforts have helped DeFi tokens hold up better than the broader market. Bitcoin's price has broken out of an ascending trendline, and it is trading below its 50- and 200-hour averages, indicating potential for a deeper price pullback.