This excerpt is from the CoinDesk newsletter 'Daybook.' Subscribe now if you haven't already. Bitcoin reached $77,400, rising alongside other risk assets after major U.S. tech companies' earnings reports steadied the market. The increase followed Apple's earnings report, which, like those of its peers including Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth.
These reports helped risk assets gain ground as renewed faith in AI growth drew investors back to equities and crypto. However, the current bounce is more indicative of relief buying than a new rally.
According to Mercado Bitcoin, the market faces short-term pressure due to mixed structural factors, including diminished hopes for rate cuts, ETF outflows, and higher geopolitical risks. Despite oil surging and over $400 million in outflows from spot bitcoin ETFs, crypto prices remained steady. Oil prices, influenced by the Iran conflict, could fuel inflation, making central banks less likely to cut rates, which could negatively impact crypto and other risk assets. The Federal Reserve maintained its rate at 3.50% to 3.75%, with four dissenting votes, the most since 1992.
This decision led to a repricing of policy expectations. 'In the short term, the market is expected to remain volatile and highly responsive to economic data,' said Rony Szuster, head of research at Mercado Bitcoin. '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, potential volatility looms due to Warsh's preference for tighter monetary policy. The crucial test for bitcoin remains at $80,000; breaking this level could attract new buyers, while a failed attempt may trigger selling.
For analysis of 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.