Bitcoin Rallies as Tech Earnings Boost Market Sentiment, Despite Ongoing Short-Term Pressures

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe now to stay updated. Bitcoin surged to $77,400, mirroring the rise of other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the market. The upswing came after Apple, along with its peers, including Alphabet, Microsoft, Meta, and Amazon, reported double-digit revenue growth, enhancing industry sentiment. These earnings reports bolstered risk assets, as renewed confidence in AI growth drew investors back to equities and crypto. However, the current bounce is attributed to relief buying rather 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 reduced hopes for rate cuts, ETF outflows, and increased geopolitical risk. Despite oil prices surging and spot bitcoin ETFs witnessing outflows of over $400 million, crypto prices held steady as April came to a close. Oil remains a crucial factor, as higher crude prices resulting from the Iran conflict could fuel inflation, making central banks less inclined to cut interest rates. This, in turn, 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. Mercado Bitcoin noted that the decision and lack of clear rate-cut signals led to a repricing of policy expectations. The company's head of research, Rony Szuster, 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, volatility is anticipated due to Warsh's preference for tightening monetary policy. The crucial test for bitcoin remains at $80,000, where a break 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 events this week, see CoinDesk's Crypto Week Ahead. Key trends and signals indicate that the weekly bitcoin price plot is testing rejection at the $80,000 resistance zone, 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 about $68,000 and the $80,000 level.