This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe now for more insights. Bitcoin surged to $77,400, mirroring gains in other risk assets after major US tech companies' earnings reports calmed market jitters. The upswing followed Apple's earnings release, which joined those of Alphabet, Microsoft, Meta, and Amazon in showcasing double-digit revenue growth.
Although the earnings reports lifted risk assets and crypto, fueled by renewed confidence in AI growth, the current bounce appears to be driven by relief rather than conviction in a new rally. According to Mercado Bitcoin, the market faces short-term pressure due to mixed structural factors, including diminished hopes for rate cuts, ETF outflows, and heightened geopolitical risks. Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs, crypto prices remained stable as April drew to a close.
The ongoing Iran conflict and disruption in the Strait of Hormuz could fuel inflation, making central banks less inclined to cut interest rates, which may negatively impact crypto and other risk assets by increasing the appeal of cash and bonds. The Federal Reserve's decision to maintain rates at 3.50% to 3.75%, coupled with the absence of clear signals for rate cuts, led to a repricing of policy expectations.
'In the short term, the market is expected to remain volatile and highly reactive to economic data,' noted 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, potential volatility looms due to Warsh's preference for tighter monetary policy. The crucial test for bitcoin lies at the $80,000 mark, where a breakthrough could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound.
For in-depth analysis of today's altcoin and derivatives activity, visit Crypto Markets Today, and for a comprehensive list of upcoming events, see CoinDesk's Crypto Week Ahead. Key trends and signals indicate that the weekly bitcoin price chart is testing resistance at $80,000, with the RSI showing early signs of a bullish divergence, although this remains unconfirmed on a weekly close.
Failure to break above this level may keep the price range-bound between the 200-day exponential moving average of approximately $68,000 and the $80,000 level.