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

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin reached $77,400, increasing alongside other risk assets after major US tech companies' earnings reports stabilized 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 boosted risk assets as renewed confidence in AI growth drew investors back to equities and crypto, though the current bounce is more relief-driven than indicative of a new rally. According to crypto exchange Mercado Bitcoin, the market faces 'short-term pressure with mixed structural factors,' including reduced hopes for rate cuts, ETF outflows, and higher geopolitical risks. Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs, crypto prices held steady. Oil prices, influenced by the Iran conflict, could fuel inflation, making central banks less likely to cut rates, which could negatively impact crypto and other risk assets. The Federal Reserve maintained rates at 3.50% to 3.75%, with four dissenting votes, the most since 1992. This led to a repricing of policy expectations. Mercado Bitcoin's research head, Rony Szuster, noted, 'In the short term, the market should remain volatile, reacting to economic data. In the medium term, the structure depends on institutional flow stabilization and global monetary policy.' With Jerome Powell's Fed chairmanship ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, potential volatility looms due to Warsh's preference for monetary policy tightening. The key test for bitcoin remains at $80,000; breaking this level could attract new buyers, while failure may trigger selling. For analysis on today's altcoin and derivatives activity, see Crypto Markets Today, and for upcoming events, see CoinDesk's Crypto Week Ahead. Currently, 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 on a weekly close. Failure to break above $80,000 keeps the price between the 200-day exponential moving average of about $68,000 and that level.