After reaching highs above $79,000, Bitcoin has retreated to $76,500, pausing its upward trajectory from late March's lows below $65,000. Recent economic data, however, indicates that a swift rebound may not be imminent.
The University of Michigan's Survey of Consumers revealed a significant drop in consumer sentiment to an all-time low of 49.8, largely driven by inflation concerns related to the Iran conflict. Inflation expectations have also surged, with the one-year gauge rising to 4.8% in April, up from 3.8% the previous month, and long-term expectations reaching 3.5%, the highest since October 2025.
This sharp increase in inflation expectations 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 long-term expectations shift is particularly concerning for the Fed, as it may indicate that inflation psychology is becoming unanchored.
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 front, sustained ETF inflows are crucial for supporting spot Bitcoin prices, while coordinated industry efforts have helped DeFi tokens withstand market volatility. The CoinDesk DeFi Select Index gained 0.5% over 24 hours, outperforming the broader market.
Bitcoin's hourly price chart shows a potential exhaustion of its uptrend, with prices trading below their 50- and 200-hour averages, indicating a possible deeper price pullback.