Bitcoin Sees Uptick as Tech Giants' Earnings Boost Market Sentiment, but Short-Term Challenges Persist

This excerpt is from the CoinDesk newsletter 'Daybook.' To stay updated, sign up here if you haven't already. Bitcoin surged to $77,400, rebounding alongside other risk assets following the release of earnings reports from major U.S. tech companies, which helped stabilize the markets. The upswing was fueled by Apple's earnings report, which, along with those of its peers including Alphabet, Microsoft, Meta, and Amazon, demonstrated double-digit revenue growth. This renewed investor confidence in the AI growth story, pulling them back into equities and crypto, although the current bounce is more indicative of relief buying than the start of a new rally. According to a note from crypto exchange Mercado Bitcoin shared with CoinDesk, the market is experiencing 'short-term pressure due to mixed structural factors,' including diminished hopes for rate cuts, outflows from ETFs, and heightened geopolitical risk. Despite oil prices surging and over $400 million in outflows from spot bitcoin ETFs as April concluded, crypto prices have held steady. The ongoing Iran conflict and disruption in the Strait of Hormuz, leading to higher crude prices, could exacerbate inflation, making central banks less inclined to lower interest rates. This could negatively impact crypto and other risk assets by making cash and bonds more appealing. The Federal Reserve's decision to maintain rates between 3.50% and 3.75%, with four dissenting voices, the most since 1992, led markets to reassess policy expectations. Rony Szuster, Mercado Bitcoin's head of research, noted, 'In the short term, the market is expected to remain volatile and highly responsive to economic data. 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 lead the June FOMC meeting, which may introduce volatility due to Warsh's support for tighter monetary policy, the key challenge for bitcoin remains at the $80,000 mark. A successful break above this level could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. For more insights into 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.' Currently trending is the weekly bitcoin price 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 keeps the price within the range defined by the 200-day exponential moving average of about $68,000 and the $80,000 level.