Bitcoin Sees Uptick as Tech Earnings Boost Market Sentiment, Despite Lingering Short-Term Pressures

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe now for more insights. Bitcoin rose to $77,400, rebounding alongside other risk assets after major US tech companies' earnings reports steadied the market. The gains followed Apple's earnings report, which, along with those of Google's parent Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth. Although the earnings reports lifted risk assets and crypto, the current bounce is attributed to relief buying rather than the start of a new rally. According to crypto exchange Mercado Bitcoin, the market faces short-term pressure due to mixed structural factors, including lower hopes for rate cuts, ETF outflows, and increased geopolitical risk. Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs, crypto prices held steady as April ended. Oil prices, influenced by the Iran conflict and disruptions in the Strait of Hormuz, could fuel inflation, making central banks less likely to cut interest rates and potentially weighing on crypto and risk assets. 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. Rony Szuster, the company's head of research, stated, 'In the short term, the market should 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 term as Fed chair 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 could attract new buyers, while a failed attempt may trigger selling. The weekly bitcoin price chart is testing resistance at $80,000, with the RSI showing early signs of a bullish divergence, though 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 about $68,000 and $80,000.