After reaching nearly $79,000, Bitcoin has retreated to $76,500, halting its rally from the late-March low of below $65,000. Those anticipating a rapid recovery should note that recent economic data does not support a significant bullish surge.
The University of Michigan's Consumer Sentiment Index has dropped to a record low of 49.8, driven 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, and long-term expectations reaching 3.5%, the highest since October 2025.
This surge in inflation expectations could limit the Federal Reserve's ability to signal interest-rate cuts, potentially capping gains in BTC and other risk assets. Analysts warn that the sharp rise in long-term expectations is particularly concerning for the Fed, 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 BTC prices, and coordinated industry efforts have helped DeFi tokens hold up better than the broader market.
The CoinDesk DeFi Select Index has gained 0.5% over 24 hours, decoupling from the CoinDesk 20's 1.5% decline. 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.