Bitcoin Surges as Tech Giants' Earnings Boost Market Sentiment, Yet Short-Term Challenges Persist

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin rose to $77,400, rebounding with other high-risk assets following the release of earnings reports from major US tech companies, which helped stabilize the markets. The increase occurred after Apple, along with its peers including Alphabet, Microsoft, Meta, and Amazon, reported double-digit revenue growth, enhancing industry sentiment. These earnings reports contributed to the rise in high-risk assets as renewed confidence in AI growth drew investors back to equities and cryptocurrency. However, the current surge is seen as relief buying rather than a sign of a new rally. According to crypto exchange Mercado Bitcoin, the market is facing 'short-term pressure with mixed structural factors,' including reduced 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 concluded. Oil prices remain a significant factor, as higher crude prices due to the Iran conflict could fuel inflation, making central banks less likely to cut interest rates. This could negatively impact crypto and other high-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. '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 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, volatility may increase due to 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, see CoinDesk's Crypto Week Ahead. Currently trending: the weekly bitcoin price 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 that level.