Bitcoin Sees Uptick as Tech Earnings Boost Market Sentiment, Despite Lingering Short-Term Pressures

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here for more insights. Bitcoin surged to $77,400, mirroring the rise of other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the market. The gains were spurred by Apple's earnings report, which, along with those of Alphabet, Microsoft, Meta, and Amazon, demonstrated double-digit revenue growth. Although the earnings reports have boosted risk assets and crypto, driven by renewed confidence in AI growth, the current upswing is attributed to relief buying rather than a conviction that a new rally has begun. According to crypto exchange Mercado Bitcoin, the market is experiencing short-term pressure due to mixed structural factors, including diminished hopes for rate cuts, ETF outflows, and heightened geopolitical risk. Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs, crypto prices have held steady. The ongoing Iran conflict and disruptions in the Strait of Hormuz could lead to higher crude prices, fueling inflation and making central banks less inclined to cut interest rates, which may negatively impact crypto and other risk assets. The Federal Reserve's decision to maintain rates at 3.50% to 3.75%, along with the absence of clear rate-cut signals, has led markets to reevaluate policy expectations. 'In the short term, the market is expected to remain volatile and highly reactive to economic data,' said Rony Szuster, head of research at Mercado Bitcoin. '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 at the Fed 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 challenge lies at the $80,000 mark. A breakthrough could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For further analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of this week's events, refer to CoinDesk's Crypto Week Ahead.