Bitcoin Rallies Amid Optimism from Big Tech Earnings, Despite Persistent Short-Term Pressures

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin reached $77,400, rising alongside 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 peers such as Alphabet, Microsoft, Meta, and Amazon, reported double-digit revenue growth. The earnings reports boosted risk assets as renewed confidence in AI growth drew investors back into equities and crypto. However, the current bounce 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 with still-mixed structural factors,' including reduced hopes for rate cuts, ETF outflows, and increased geopolitical risk. Despite oil prices surging and over $400 million in outflows from spot bitcoin ETFs, crypto prices remained steady as April came to a close. Oil prices remain a significant factor, as higher crude prices due to the Iran conflict and disruption 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%, 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, volatility is anticipated due to Warsh's preference for tightening monetary policy. The key test for bitcoin remains at $80,000, with a break potentially drawing in new buyers and a failed move possibly triggering selling if leveraged longs unwind. For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today, and for a comprehensive list of events this week, see CoinDesk's 'Crypto Week Ahead.' The weekly plot of the bitcoin price is testing rejection at the $80,000 resistance zone, with the RSI showing early signs of a bullish divergence, though 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 about $68,000 and the $80,000 level.