Bitcoin Sees Gains Amid Tech Earnings Optimism, Short-Term Pressures Persist

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe now if you haven't already. Bitcoin surged to $77,400, rising alongside other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the markets. The upward movement came after Apple, along with its peers including Alphabet, Microsoft, Meta, and Amazon, reported significant double-digit revenue growth. These earnings reports boosted risk assets as renewed confidence in AI growth drew investors back to equities and crypto. However, the current bounce is attributed more to relief buying than a conviction that a new rally has begun. According to crypto exchange Mercado Bitcoin, the market is experiencing short-term pressure due to mixed structural factors, including decreased hopes for rate cuts, ETF outflows, and increased geopolitical risk. Despite oil prices surging and over $400 million in outflows from spot bitcoin ETFs, crypto prices remained steady as April came to a close. The ongoing conflict in Iran and disruptions in the Strait of Hormuz could lead to higher crude prices, fueling inflation and making central banks less likely to cut interest rates. This 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. The absence of clear rate-cut signals led to markets repricing policy expectations. Rony Szuster, head of research at Mercado Bitcoin, stated, 'In the short term, the market is expected to remain volatile and highly reactive to economic data. 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 chairmanship at the Fed ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, potential volatility may arise due to Warsh's preference for tightening monetary policy. The key test for bitcoin remains at $80,000, where a break could attract new buyers, while a failed move may trigger selling if leveraged longs unwind. For further analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of events this week, refer to CoinDesk's 'Crypto Week Ahead'. Currently trending is the weekly plot of the bitcoin price testing rejection at the $80,000 resistance zone, with the RSI showing early signs of a bullish divergence, though 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 about $68,000 and the $80,000 level.