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Bitcoin surged to $77,400, rebounding alongside other risk assets after major US tech companies' earnings reports helped stabilize the market. The gains followed Apple's earnings report, which, along with those of Google's parent company Alphabet, Microsoft, Meta, and Amazon, demonstrated double-digit revenue growth. These reports renewed confidence in the AI growth narrative, prompting investors to re-enter equities and crypto, although the current bounce is attributed to relief buying rather than a conviction that a new rally has begun.
According to a note from crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure due to mixed structural factors,' including reduced hopes for rate cuts, outflows from ETFs, and increased geopolitical risk. Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs, crypto prices remained steady as April drew to a close.
The ongoing conflict in Iran and disruption in the Strait of Hormuz may lead to higher crude prices, fueling inflation and making central banks less likely to cut interest rates. This could negatively impact crypto and other risk assets by making cash and bonds more attractive. The Federal Reserve maintained interest rates at 3.50% to 3.75%, with four dissenting voices, the most since 1992.
Mercado Bitcoin noted that the decision and lack of clear rate-cut signals led to a repricing of policy expectations. 'In the short term, the market is expected to remain volatile and highly reactive to economic data,' said Rony Szuster, the company's head of research. '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 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, with a potential break drawing in new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of this week's events, see CoinDesk's Crypto Week Ahead. The weekly bitcoin price chart is testing resistance at the $80,000 zone, with the RSI showing early signs of a bullish divergence, although this is unconfirmed on a weekly close. Failure to break above this level may keep the price range-bound between the 200-day exponential moving average of approximately $68,000 and the $80,000 level.