This excerpt is from the CoinDesk newsletter 'Daybook.' To stay updated, sign up here if you haven't already. Bitcoin reached $77,400, rebounding alongside other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the market.
The upswing occurred after Apple, along with its peers including Alphabet, Microsoft, Meta, and Amazon, reported double-digit revenue growth, enhancing industry sentiment. Although the earnings reports led to a rise in risk assets due to renewed confidence in AI growth, the current bounce is attributed more to relief buying than the conviction that a new rally has begun. According to a note shared with CoinDesk by crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure with mixed structural factors,' including reduced hopes for rate cuts, ETF outflows, and increased geopolitical risk.
Despite oil prices surging and over $400 million in outflows from spot bitcoin ETFs as April ended, crypto prices remained steady. Oil prices, influenced by the Iran conflict and disruptions in the Strait of Hormuz, could fuel inflation, making central banks less inclined to cut interest rates, which in turn could impact crypto and other risk assets by making cash and bonds more appealing. The Federal Reserve maintained interest rates at 3.50% to 3.75%, with four dissenting voices, the most since 1992. Mercado Bitcoin noted that the decision and lack of clear rate-cut signals led to a repricing of policy expectations.
The company's head of research, Rony Szuster, stated, 'In the short term, the market is expected to remain volatile and highly reactive to economic data. In the medium term, the structure remains dependent on the stabilization of institutional flows and the path of global monetary policy.' With Jerome Powell's chairmanship at the Fed ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, which could induce volatility given Warsh's preference for tightening monetary policy, the key test for bitcoin remains at $80,000.
A successful break could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For further analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of events this week, refer to CoinDesk's Crypto Week Ahead.
Currently trending is the weekly bitcoin price testing rejection at the $80,000 resistance zone, with the RSI showing early signs of a bullish divergence, though this remains unconfirmed on a weekly close. Failure to break above $80,000 keeps the price range-bound between the 200-day exponential moving average of about $68,000 and the $80,000 level.