This excerpt is from CoinDesk's 'Daybook' newsletter. Subscribe here if you haven't already. Bitcoin surged to $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 those of its peers such as Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth. These reports bolstered risk assets and crypto as confidence in AI growth and renewed investor interest led to relief buying, though the current bounce is more indicative of short-term relief rather 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 amidst mixed structural factors,' including decreased hopes for rate cuts, outflows from ETFs, and higher geopolitical risks.
Despite oil price surges and over $400 million in outflows from spot bitcoin ETFs as April ended, crypto prices remained steady. Oil prices, influenced by the Iran conflict and disruptions in the Strait of Hormuz, could fuel inflation and make central banks less inclined to cut interest rates, potentially affecting crypto and other risk assets by making cash and bonds more appealing. 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 signals for rate cuts 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 term as Fed chair ending on May 15 and Kevin Warsh expected to chair the June FOMC meeting, potential volatility may arise due to Warsh's stance on tightening monetary policy. The key challenge remains at the $80,000 level; breaking through could attract new buyers, while a failed attempt may trigger selling if leveraged long positions unwind. For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today, and for a comprehensive list of this week's events, refer to CoinDesk's 'Crypto Week Ahead.' Currently trending: Today's signal indicates that the weekly bitcoin price plot is 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 could keep the price within the range of the 200-day exponential moving average of about $68,000 and the $80,000 level.