Bitcoin's Rally Stalls as Macro Factors Intervene

After reaching above $79,000 earlier in the week, Bitcoin has retreated to $76,500, stalling its rally from late March's lows below $65,000. Those anticipating a swift rebound may need to reconsider, given recent economic data does not support a significant bullish surge. The University of Michigan's Survey of Consumers revealed a record-low consumer sentiment index of 49.8, driven by inflation concerns tied 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 rise 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 indicates inflation psychology may be becoming unanchored. 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. Sustained ETF inflows remain crucial for supporting spot BTC, while coordinated industry efforts have helped DeFi tokens hold up despite the KelpDAO exploit. The CoinDesk DeFi Select Index gained 0.5% over 24 hours, outperforming the broader market. Bitcoin's hourly price swings have broken out of an ascending trendline, trading at a discount to its 50- and 200-hour averages, indicating uptrend exhaustion and potential for a deeper price pullback.