After reaching nearly $79,000, bitcoin has retreated to $76,500, pausing its ascent from late March's low of under $65,000. Those anticipating a rapid resurgence 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, largely due to inflationary pressures stemming from the Iran conflict. Inflation expectations have also spiked, with the one-year gauge rising to 4.8% in April from 3.8% the previous month, and long-term expectations reaching 3.5%, the highest since October 2025. This increase in inflation expectations could limit the Federal Reserve's ability to signal interest rate cuts or liquidity easing, potentially capping gains in bitcoin 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. Meanwhile, traders are pricing in a potential Bank of Japan rate increase in June. In the crypto market, sustained ETF inflows are crucial for supporting spot bitcoin prices.
Coordinated industry efforts have helped DeFi tokens hold up better than the broader market, with the CoinDesk DeFi Select Index gaining 0.5% over 24 hours. 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 potential for a deeper price pullback.