Bitcoin Sees Uptick as Tech Earnings Boost Market Sentiment, but Near-Term Challenges Persist

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 firms, which helped stabilize the market. The gains followed Apple's earnings report, which, like those of its peers including Google's parent company Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth. These reports boosted risk assets as renewed confidence in AI growth drew investors back into equities and crypto, although the current bounce appears to be driven by relief rather than a conviction that a new rally is underway. 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 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 likely to cut interest rates, which could negatively impact crypto and other risk assets by making cash and bonds more attractive. 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 term as Fed chair ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, which could lead to increased volatility due to Warsh's preference for tighter monetary policy, the key test for bitcoin remains at $80,000. Breaking through this level could attract new buyers, while a failed attempt may trigger selling if leveraged long positions unwind. 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. The weekly bitcoin price chart is testing resistance at $80,000, with the RSI showing early signs of a bullish divergence, although this has not been confirmed 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.