Following a brief surge above $79,000, Bitcoin has retreated to around $76,500, pausing its upward momentum from the late-March lows of under $65,000. Those anticipating a rapid resurgence should note that recent economic data does not support a significant bullish move. The University of Michigan's Survey of Consumers revealed a record-low consumer sentiment index of 49.8, largely driven by inflationary pressures linked to the Iran conflict.
Inflation expectations have also spiked, with the one-year gauge jumping to 4.8% in April from 3.8% in the previous month, and long-term expectations rising to 3.5%, the highest since October 2025. This increase in inflation expectations could limit the Federal Reserve's ability to signal interest-rate cuts or liquidity easing, as additional monetary easing may reinforce inflationary pressures, potentially capping gains in Bitcoin and other risk assets.
Analysts note that the sharp rise in long-term expectations is particularly concerning for the Federal Reserve, as it suggests that 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, and sustained ETF inflows remain crucial for supporting spot Bitcoin 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.
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.