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

This excerpt is taken from the CoinDesk 'Daybook' newsletter. To stay updated, sign up here if you haven't done so already. Bitcoin reached $77,400, rebounding in tandem with other risk assets following the release of earnings reports by major US tech companies, which helped stabilize the markets. The increase followed Apple's (AAPL) earnings report, which, along with those of its peers including Alphabet (GOOG), Microsoft (MSFT), Meta (META), and Amazon (AMZN), demonstrated double-digit revenue growth. This collectively enhanced industry sentiment. The earnings reports contributed to a rise in risk assets, driven by renewed confidence in AI growth, pulling investors back into equities and crypto. However, the current bounce is attributed more to relief buying than a conviction that a new rally has commenced. According to a note shared with CoinDesk by crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure amidst mixed structural factors,' including diminished hopes for rate cuts, ETF outflows, and heightened geopolitical risk. Crypto prices remained stable this week despite oil price surges and over $400 million in outflows from spot bitcoin ETFs as April concluded. Oil prices are a significant factor, with higher crude prices resulting from the Iran conflict and disruptions in the Strait of Hormuz potentially fueling inflation. This could make central banks less inclined to cut interest rates, which in turn could impact crypto and other risk assets by making cash and bonds more appealing. The Federal Reserve maintained interest rates between 3.50% and 3.75% this week, with four dissenting voices marking the most since 1992. Mercado Bitcoin noted that the decision and lack of clear signals for rate cuts led to markets repricing policy expectations. 'In the short term, the market is expected to remain volatile and highly responsive to economic data,' stated Rony Szuster, the company's head of research. 'In the medium term, the structure will depend on the stabilization of institutional flows and the trajectory 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, potential volatility may arise given Warsh's inclination towards tightening monetary policy. The crucial test remains at the $80,000 level. A breakthrough could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. It's essential to stay alert. For further analysis of today's altcoin and derivatives activity, refer to Crypto Markets Today. A comprehensive list of this week's events can be found in CoinDesk's 'Crypto Week Ahead.' Current Trends Today's Signal The weekly bitcoin price chart is testing resistance at the $80,000 zone, with the RSI indicating early signs of a bullish divergence - the price has printed a lower low while the RSI has held higher, though this remains unconfirmed on a weekly close. Failure to break above this level could keep the price within the range bounded by the 200-day exponential moving average of about $68,000 and the $80,000 level.