Bitcoin Rebounds as Tech Earnings Boost Sentiment, But Short-Term Challenges Persist

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe now if you haven't already. Bitcoin surged to $77,400, rising in tandem with other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the markets. The gains followed Apple's earnings report, which, along with those of Google parent Alphabet, Microsoft, Meta, and Amazon, all showed double-digit revenue growth. The earnings reports boosted risk assets as renewed confidence in AI growth drew investors back to equities and crypto, although the current rebound reflects 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 with mixed structural factors,' including reduced 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 held steady as April came to a close. Oil prices remain a crucial factor, as higher crude prices due to the Iran conflict and disruptions in the Strait of Hormuz could fuel inflation, 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% this week, 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 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, which could induce volatility given Warsh's preference for tightening monetary policy, the key test for bitcoin remains at $80,000. A break above this level could attract new buyers, while a failed move may trigger selling if leveraged longs unwind. Stay alert. For more analysis of today's activity in altcoins and derivatives, see Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk's 'Crypto Week Ahead.'