After reaching highs of over $79,000, Bitcoin has retreated to $76,500, stalling its rally from the lows below $65,000 in late March. Those anticipating a rapid resurgence should note that recent economic data does not support a significant bullish move.
The University of Michigan's Consumer Sentiment Index has dropped to a record low of 49.8, driven largely by inflationary pressures related to the Iran conflict. Inflation expectations have also surged, with the one-year gauge rising to 4.8% in April from 3.8% the previous month, and long-term expectations increasing to 3.5%, the highest since October 2025. This sharp rise could limit the Federal Reserve's ability to signal interest-rate cuts, potentially capping upside or slowing gains in BTC and other risk assets. Analysts warn that the long-term expectations move is the more critical data point for the Federal Reserve, as it assesses whether inflation psychology is becoming unanchored.
The Fed is expected to maintain its benchmark interest rate between 3.5% and 3.75% this Wednesday. Traders are also anticipating a potential Bank of Japan rate increase in June. Meanwhile, sustained ETF inflows are crucial for supporting spot BTC on dips. Coordinated industry efforts to contain the fallout from the KelpDAO exploit have helped DeFi tokens hold up better than the broader market.
The CoinDesk DeFi Select Index gained 0.5% over 24 hours, decoupling from the CoinDesk 20's 1.5% decline. Bitcoin's hourly price swings have broken out of an ascending trendline, and prices are trading at a discount to their 50- and 200-hour averages, indicating uptrend exhaustion and potential for a deeper price pullback.