Bitcoin Sees Uptick as Positive Earnings from Tech Giants Boost Market Sentiment

This excerpt is taken from CoinDesk's 'Daybook' newsletter. To stay updated, sign up here if you haven't done so already. Bitcoin experienced a surge to $77,400, echoing the trend of other risk assets as strong earnings reports from major US tech companies helped stabilize the market. Following the lead of its peers, including Google's parent company Alphabet, Microsoft, Meta, and Amazon, Apple released an earnings report that enhanced industry sentiment. These companies reported double-digit revenue growth, bolstering confidence in the AI growth narrative and prompting investors to re-enter the equity and crypto markets, albeit cautiously. A note from crypto exchange Mercado Bitcoin highlights that the market is currently under 'short-term pressure with mixed structural factors,' including diminished hopes for rate cuts, ETF outflows, and increased geopolitical risks. Despite oil price surges and significant outflows from spot bitcoin ETFs, crypto prices remained steady. The ongoing situation with oil, influenced by the Iran conflict and disruptions in the Strait of Hormuz, could fuel inflation, making central banks less inclined to cut interest rates and potentially dampening the appeal of crypto and other risk assets. The Federal Reserve's decision to maintain rates at 3.50% to 3.75%, coupled with the absence of clear signals for rate cuts, has led to a repricing of policy expectations. According to Rony Szuster, head of research at Mercado Bitcoin, 'In the short term, the market is expected to remain volatile, reacting strongly to economic data. In the medium term, the structure will depend 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 lead the June FOMC meeting, market volatility is anticipated due to Warsh's preference for tighter monetary policy. A crucial test for bitcoin lies at the $80,000 mark; surpassing this could attract new buyers, while a failed attempt might trigger selling if leveraged long positions are unwound. For in-depth analysis of today's altcoin and derivatives activity, refer to Crypto Markets Today, and for a comprehensive list of upcoming events, see CoinDesk's Crypto Week Ahead. Current 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, though this remains unconfirmed pending a weekly close. Failure to break above this level could keep the price within the range bounded by the 200-day exponential moving average of approximately $68,000 and the $80,000 level.