Bitcoin Rebounds as Tech Earnings Boost Market Sentiment, But Short-Term Challenges Persist

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe now if you haven't already. Bitcoin's price surged to $77,400, rising in tandem with other high-risk assets following the release of earnings reports from major US tech companies, which helped stabilize the markets. The upswing was triggered by Apple's earnings report, which, along with those of Google's parent company Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth. The earnings reports bolstered risk assets and crypto, as renewed faith in AI-driven growth drew investors back in, although the current rebound appears to be driven by relief rather than confidence in a new upward trend. According to a note from crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure with mixed structural factors,' including decreased hopes for rate cuts, ETF outflows, and heightened geopolitical risk. Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs, crypto prices remained stable as April came to a close. Oil prices remain a crucial factor, as higher crude prices stemming from the Iran conflict and disruptions in the Strait of Hormuz could fuel inflation, making central banks less likely to cut interest rates. This, in turn, could make cash and bonds more attractive, negatively impacting crypto and other high-risk assets. The Federal Reserve maintained interest rates at 3.50% to 3.75%, with four dissenting votes, the most since 1992. Mercado Bitcoin noted that the decision and lack of clear rate-cut signals led to a repricing of policy expectations. 'In the short term, the market is expected to remain volatile and highly sensitive 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 chairman ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, which may introduce volatility due to Warsh's preference for tighter monetary policy, the key test for bitcoin remains at $80,000. A breakthrough could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For more analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of this week's events, see CoinDesk's Crypto Week Ahead. Currently trending: Today's signal indicates that the weekly bitcoin price chart is testing resistance at the $80,000 zone, with the RSI showing early signs of a bullish divergence, although this is unconfirmed on a weekly close. Failure to break above this level may keep the price range-bound between the 200-day exponential moving average of approximately $68,000 and the $80,000 level.