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

This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin reached $77,400, rebounding alongside other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the markets. Gains were fueled after Apple, along with peers such as Alphabet, Microsoft, Meta, and Amazon, reported double-digit revenue growth, enhancing industry sentiment. Although the bounce can be attributed to relief buying rather than the start of a new rally, it reflects renewed confidence in the AI growth narrative, drawing investors back to equities and crypto. According to a note from crypto exchange Mercado Bitcoin shared with CoinDesk, the market is currently facing 'short-term pressure due to mixed structural factors,' including diminished hopes for rate cuts, ETF outflows, and heightened geopolitical risks. Crypto prices remained steady despite oil price surges and over $400 million in outflows from spot bitcoin ETFs as April drew to a close. Oil prices continue to be a crucial factor, with higher crude prices stemming from the Iran conflict and disruptions in the Strait of Hormuz potentially fueling inflation. This could make central banks less inclined to cut interest rates, thereby increasing the appeal of cash and bonds over crypto and other risk assets. The Federal Reserve maintained interest rates at 3.50% to 3.75% this week, with four dissenting votes being the highest since 1992. Mercado Bitcoin noted that the decision, coupled with the lack of clear signals for rate cuts, led to markets repricing policy expectations. 'In the short term, the market is expected to remain volatile and highly responsive to economic data,' stated Rony Szuster, the company's head of research. 'In the medium term, the structure will depend on the stabilization of institutional flows and the trajectory of global monetary policy.' With Jerome Powell's chairmanship at the Fed set to end on May 15 and Kevin Warsh expected to chair the June FOMC meeting, potential volatility may arise given Warsh's preference for tightening monetary policy. A key test for bitcoin remains at the $80,000 level. A successful break above this level could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound. Remain alert. For further analysis of today's altcoin and derivatives activity, see Crypto Markets Today. For a comprehensive list of this week's events, refer to CoinDesk's 'Crypto Week Ahead.' Current trends Today's signal The weekly bitcoin price chart is testing resistance at the $80,000 zone, with the RSI showing early signs of a bullish divergence, where the price recorded a lower low while the RSI remained higher, though this is unconfirmed on a weekly close. Failure to break above $80,000 would keep the price within the range bounded by the 200-day exponential moving average of approximately $68,000 and the $80,000 level.