Bitcoin Bulls Face Hurdles as Economic Indicators Point to Slower Growth

Following a brief surge above $79,000, Bitcoin has retreated to $76,500, stalling its rally from the late-March lows of under $65,000. Recent economic data suggests that a rapid return to form may be unlikely. The University of Michigan's Survey of Consumers reported a record-low consumer sentiment index of 49.8, driven primarily by inflation concerns related to the Iran conflict. Inflation expectations have also increased, with the one-year gauge rising to 4.8% in April, up from 3.8% the previous month. Long-term expectations have reached 3.5%, the highest level since October 2025. This surge in inflation expectations could limit the Federal Reserve's ability to signal interest-rate cuts, potentially capping gains in Bitcoin and other risk assets. Analysts warn that the long-term expectations move is particularly concerning for the Federal Reserve, as it may indicate that inflation psychology is becoming unanchored. The Fed is expected to maintain its benchmark interest rate between 3.5% and 3.75% this Wednesday, while traders are also anticipating a potential Bank of Japan rate increase in June. In the crypto market, sustained ETF inflows are crucial for supporting spot Bitcoin prices, and coordinated industry efforts have helped DeFi tokens hold up better than the broader market. Bitcoin's hourly price swings have broken out of an ascending trendline, and prices are trading at a discount to their 50- and 200-hour averages, indicating uptrend exhaustion and potential for a deeper price pullback.