This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin reached $77,400, rising alongside other risk assets after major US tech companies' earnings reports stabilized the market. The increase followed Apple's earnings report, which, along with those from Google's parent Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth.
Although the gains reflect relief buying rather than the start of a new rally, renewed confidence in AI growth drew investors back into equities and crypto. However, crypto exchange Mercado Bitcoin noted that the market faces short-term pressure due to mixed structural factors, including reduced hopes for rate cuts, ETF outflows, and higher geopolitical risks. Crypto prices remained steady despite oil price surges and over $400 million in outflows from spot bitcoin ETFs.
The Iran conflict and Strait of Hormuz disruption could fuel inflation, making central banks less likely to cut interest rates, which may negatively impact crypto and other risk assets. The Federal Reserve maintained rates at 3.50%-3.75%, with four dissenting voices, the most since 1992. The decision led markets to reprice policy expectations. According to Rony Szuster, head of research at Mercado Bitcoin, 'In the short term, the market should remain volatile and highly reactive to economic data.
In the medium term, the structure remains dependent on the stabilization of institutional flows and the path of global monetary policy.' With Jerome Powell's chairmanship ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, volatility may increase due to Warsh's preference for tightening monetary policy. The key test for bitcoin remains at $80,000, where a break could attract new buyers, while a failed move may trigger selling.
For analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a list of events this week, see CoinDesk's 'Crypto Week Ahead.' The weekly bitcoin price plot is testing rejection at the $80,000 resistance zone, with the RSI showing early signs of a bullish divergence, though unconfirmed on a weekly close. Failure to break above may keep the price range-bound between the 200-day exponential moving average of about $68,000 and that level.