Bitcoin Sees Uptick as Tech Giants' Earnings Boost Market Sentiment, Despite Ongoing Short-Term Pressures

This excerpt is taken from CoinDesk's 'Daybook' newsletter. To stay updated, sign up here if you haven't already. Bitcoin surged to $77,400, mirroring the upward trend of other risk assets following the release of earnings reports by major US tech companies, which helped stabilize the market. The gains were fueled by Apple's earnings report, which, along with those of Alphabet, Microsoft, Meta, and Amazon, demonstrated double-digit revenue growth. These reports bolstered risk assets and crypto by reigniting confidence in the AI growth narrative, although the current bounce is attributed more to relief buying than a conviction that a new rally is underway. According to a note from crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure due to mixed structural factors,' including diminished hopes for rate cuts, ETF outflows, and heightened geopolitical risk. Despite oil prices surging and over $400 million in outflows from spot bitcoin ETFs as April concluded, crypto prices remained steady. The ongoing Iran conflict and disruptions in the Strait of Hormuz, leading to higher crude prices, could exacerbate inflation, making central banks less inclined to cut interest rates. This scenario could negatively impact crypto and other risk assets by making cash and bonds more appealing. The Federal Reserve's decision to maintain rates at 3.50% to 3.75%, despite four dissenting voices, the most since 1992, led markets to reevaluate policy expectations, according to Mercado Bitcoin. Rony Szuster, the company's head of research, noted, 'In the short term, the market is expected to remain volatile and highly responsive to economic data. In the medium term, the structure will depend on the stabilization of institutional flows and the trajectory 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, which may introduce volatility given Warsh's stance on tightening monetary policy, the $80,000 mark remains a crucial test. A breakthrough could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For further analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of this week's events, refer to CoinDesk's 'Crypto Week Ahead.' Currently trending is the weekly bitcoin price testing resistance at the $80,000 zone, with the RSI indicating early signs of a bullish divergence, though this remains unconfirmed on a weekly close. Failure to break above this level keeps the price within the range bounded by the 200-day exponential moving average of about $68,000 and the $80,000 level.