Bitcoin Sees Uptick as Tech Earnings Boost Market Sentiment, but Short-Term Uncertainty Persists

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here for more insights. Bitcoin reached $77,400, rising alongside other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the markets. The gains followed Apple's earnings report, which, along with those of Google's parent company Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth. These reports bolstered risk assets, driven by renewed confidence in AI growth, pulling investors back into equities and crypto. However, the current bounce is more indicative of relief buying than a conviction that a new rally has begun. According to crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure with mixed structural factors,' including reduced 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 came to a close. Oil prices, influenced by the Iran conflict and disruptions in the Strait of Hormuz, could fuel inflation, making central banks less inclined to cut interest rates, which could negatively impact crypto and other 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. This decision, coupled with the lack of clear signals for rate cuts, led to a repricing of policy expectations. Rony Szuster, Mercado Bitcoin's head of research, noted, 'In the short term, the market is expected to remain volatile, reacting strongly to economic data. In the medium term, the structure depends 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, potential volatility is anticipated due to Warsh's preference for tighter monetary policy. The crucial test for bitcoin remains at the $80,000 level; breaking through could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For more analysis on today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of this week's events, refer to CoinDesk's Crypto Week Ahead. Currently trending: the bitcoin price's weekly plot 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 this level keeps the price range-bound between the 200-day exponential moving average of about $68,000 and the $80,000 level.