Bitcoin Bulls Face Resistance as Economic Indicators Signal Caution

After reaching above $79,000 earlier in the week, Bitcoin has pulled back to $76,500, stalling its rally from the late-March lows below $65,000. Those anticipating a swift rebound 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, primarily driven by inflationary pressures stemming from the Iran conflict. Inflation expectations have also surged, with the one-year gauge rising to 4.8% in April from 3.8% the previous month, and long-term expectations increasing to 3.5%, the highest since October 2025. This sharp rise could limit the Federal Reserve's ability to signal interest-rate cuts or liquidity easing, potentially capping upside or slowing gains in BTC and other risk assets. Analysts warn that the long-term expectations move is the more critical data point for the Federal Reserve, as it indicates whether inflation psychology is becoming unanchored. The Fed is expected to maintain its benchmark interest rate between 3.5% and 3.75% this Wednesday, while traders are pricing in a potential Bank of Japan rate increase in June. In the crypto market, sustained ETF inflows are crucial for supporting spot BTC on dips, and coordinated industry efforts 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 show that the cryptocurrency has dropped out of an ascending trendline, with prices trading at a discount to their 50- and 200-hour averages, indicating uptrend exhaustion and potential for a deeper price pullback.