Bitcoin's Rally Stalls as Economic Data Dampens Bullish Sentiment

After reaching nearly $79,000, Bitcoin has retreated to $76,500, halting its surge from late March's lows below $65,000. Those anticipating a quick rebound should note that recent economic indicators do not favor a significant bullish move. The University of Michigan's Consumer Sentiment Index has dropped to a record low of 49.8, driven by inflation concerns related to the Iran conflict. Inflation expectations have also increased, with the one-year gauge rising to 4.8% in April, up from 3.8% the previous month. Long-term expectations have reached 3.5%, the highest since October 2025. This surge in inflation expectations could limit the Federal Reserve's ability to signal interest rate cuts, potentially capping gains in BTC and other risk assets. Analysts warn that the long-term expectations shift is particularly concerning for the Fed, as it may indicate that inflation psychology is becoming unanchored. The Fed is expected to maintain its benchmark interest rate between 3.5% and 3.75% this Wednesday. Meanwhile, traders are also anticipating a potential Bank of Japan rate increase in June. In the crypto market, sustained ETF inflows are crucial for supporting spot BTC prices. Coordinated industry efforts to mitigate the KelpDAO exploit have helped DeFi tokens perform better than the broader market. The CoinDesk DeFi Select Index has gained 0.5% over 24 hours, outperforming the CoinDesk 20's 1.5% decline. Bitcoin's hourly price swings have broken out of an ascending trendline, and prices are trading below their 50- and 200-hour averages, indicating uptrend exhaustion and potential for a deeper price pullback.