This excerpt is from the CoinDesk 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin reached $77,400, rising alongside other risk assets after major US tech companies' earnings reports stabilized 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 these reports lifted risk assets and crypto due to renewed confidence in AI growth, the current bounce appears to be driven by relief 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 remained 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, which would negatively impact crypto and other risk assets.
The Federal Reserve maintained rates at 3.50% to 3.75%, with four dissenting voices, the most since 1992. This decision and the 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, Mercado Bitcoin'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, volatility may increase due to Warsh's preference for tightening monetary policy.
The crucial test remains at $80,000; breaking through could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. 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 bitcoin price's weekly plot is testing the $80,000 resistance zone, with the RSI showing early signs of a bullish divergence, though this remains unconfirmed on a weekly close. Failing to break above $80,000 would keep the price range-bound between the 200-day exponential moving average of about $68,000 and that level.