This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin reached $77,400, rising alongside other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the market. The increase came after Apple, along with other industry peers such as Alphabet, Microsoft, Meta, and Amazon, reported earnings that boosted sentiment across the sector with double-digit revenue growth.
These earnings reports helped risk assets climb as renewed confidence in AI growth drew investors back into equities and crypto, although the current bounce is more indicative of relief buying than a sign of the start of a new rally. According to a note shared with CoinDesk by crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure due to mixed structural factors,' including decreased hopes for rate cuts, ETF outflows, and heightened geopolitical risk. Despite oil prices surging and over $400 million in outflows from spot bitcoin ETFs as April concluded, 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 and potentially weighing on 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 signals for rate cuts led to a repricing of policy expectations. 'In the short term, the market is expected to remain volatile and highly reactive to economic data,' said Rony Szuster, the company's head of research. 'In the medium term, the structure will depend on the stabilization of institutional flows and the path of global monetary policy.' With Jerome Powell's term as Fed chair ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, which could introduce volatility given Warsh's preference for tightening monetary policy, the key test for bitcoin remains at $80,000.
A break above this level could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of this week's events, refer to CoinDesk's 'Crypto Week Ahead.' Currently trending: the weekly bitcoin price chart is testing resistance at $80,000, 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.