Bitcoin Sees Uptick as Tech Earnings Boost Market Sentiment, but Near-Term Challenges Persist

This excerpt is from the CoinDesk newsletter 'Daybook.' To stay updated, sign up here if you haven't already. Bitcoin reached $77,400, rebounding alongside other risk assets after major US tech companies' earnings reports helped stabilize 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. These reports bolstered risk assets, including equities and crypto, as renewed confidence in AI growth drew investors back in, though the current bounce seems to reflect relief rather than the start of a new rally. According to crypto exchange Mercado Bitcoin, the market faces 'short-term pressure with 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 Strait of Hormuz disruptions, could fuel inflation, making central banks less likely to cut rates, which would negatively impact crypto and other risk assets by making cash and bonds more appealing. The Federal Reserve maintained rates at 3.50% to 3.75%, with four dissenting voices, the most since 1992, leading to a repricing of policy expectations. 'In the short term, the market should remain volatile, reacting highly to economic data,' said Rony Szuster, Mercado Bitcoin's head of research. 'In the medium term, the structure depends on the stabilization of institutional flows and global monetary policy.' With Jerome Powell's Fed chairmanship ending on May 15 and Kevin Warsh expected to lead the June FOMC meeting, potentially favoring tighter monetary policy, volatility is anticipated. The key challenge for bitcoin remains breaking the $80,000 barrier, which could attract new buyers or trigger selling if the move fails. For more insights into today's altcoin and derivatives activity, see Crypto Markets Today, and for upcoming events, refer to CoinDesk's Crypto Week Ahead. Currently trending is the weekly bitcoin price testing resistance at $80,000, with the RSI indicating early signs of a bullish divergence, though this remains unconfirmed. Failure to break above $80,000 could keep the price between the 200-day exponential moving average of about $68,000 and the $80,000 level.