Following a brief surge above $79,000, Bitcoin has retreated to $76,500, halting its upward momentum from late March's lows below $65,000. Prospects for a swift recovery may be hindered by recent economic data, which 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, driven primarily by inflation concerns related to the Iran conflict. Inflation expectations have also risen sharply, with the one-year gauge increasing to 4.8% in April from 3.8% the previous month, and long-term expectations reaching 3.5%, the highest since October 2025.
This surge in inflation expectations could limit the Federal Reserve's ability to signal interest-rate cuts or liquidity easing, as additional monetary easing may exacerbate inflationary pressures, potentially capping upside or slowing gains in BTC and other risk assets. Analysts at Bitfinex noted that the long-term expectations move is the more critical data point for the Federal Reserve, as it is the variable the central bank monitors closely when assessing whether 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 pricing in a potential Bank of Japan rate increase in June. Sustained ETF inflows remain crucial to supporting spot BTC on dips, while coordinated industry efforts to contain the fallout from the KelpDAO exploit have helped DeFi tokens hold up better than the broader market. The CoinDesk DeFi Select Index gained 0.5% over 24 hours, decoupling from the CoinDesk 20's 1.5% decline.
Bitcoin's hourly price swings since late March indicate that prices have broken out of an ascending trendline, trading at a discount to their 50- and 200-hour averages, pointing to uptrend exhaustion and scope for a deeper price pullback.