Bitcoin Rebounds as Tech Earnings Boost Market Sentiment, Despite Persistent Short-Term Challenges

This excerpt is from the CoinDesk newsletter 'Daybook.' Subscribe here if you haven't already. Bitcoin surged to $77,400, rebounding alongside other risk assets after major US tech companies' earnings reports helped stabilize markets. The upswing followed Apple's earnings report, which joined those of its peers, including Google parent Alphabet, Microsoft, Meta, and Amazon, in showcasing double-digit revenue growth. These reports bolstered risk assets as renewed confidence in AI growth drew investors back to equities and crypto, although the current bounce appears to be driven more by relief buying than the conviction that a new rally is underway. According to a note from crypto exchange Mercado Bitcoin, the market is experiencing 'short-term pressure with mixed structural factors,' including diminished hopes for rate cuts, ETF outflows, and increased geopolitical risk. Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs, crypto prices remained steady as April ended. Oil prices, influenced by the Iran conflict and disruptions in the Strait of Hormuz, could fuel inflation, making central banks less inclined to lower interest rates, which in turn could impact crypto and other risk assets by making cash and bonds more appealing. 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 sensitive 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, which may induce volatility given Warsh's preference for tightening monetary policy, the key test for bitcoin remains at $80,000. A breakthrough could attract 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 $80,000, with the RSI showing early signs of a bullish divergence, though this remains unconfirmed on a weekly close. Failure to break above $80,000 would keep the price range-bound between the 200-day exponential moving average of about $68,000 and that level.