Bitcoin's Ascent Halted as Economic Indicators Raise Concerns

After reaching above $79,000, 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 rebound may not be imminent. The University of Michigan's Consumer Sentiment Index has dropped to a record low of 49.8, driven primarily by inflation concerns linked to the Iran conflict. Inflation expectations have also surged, with the one-year gauge increasing to 4.8% in April, up from 3.8% the previous month. Long-term expectations have risen to 3.5%, the highest since October 2025. This shift could limit the Federal Reserve's ability to signal interest rate cuts, potentially capping gains in Bitcoin and other risk assets. Analysts note that the move in long-term expectations is particularly concerning for the Fed, as it suggests inflation psychology may be becoming unanchored. With the Fed expected to maintain its benchmark interest rate, traders are also anticipating a potential rate increase by the Bank of Japan in June. Meanwhile, sustained ETF inflows remain crucial for supporting spot Bitcoin prices. Coordinated efforts to mitigate the impact of the KelpDAO exploit have helped DeFi tokens outperform the broader market. The CoinDesk DeFi Select Index gained 0.5% over 24 hours, while the CoinDesk 20 declined by 1.5%. Bitcoin's price has broken out of an ascending trendline, trading below its 50- and 200-hour moving averages, indicating potential for a deeper price pullback.