After reaching $80,754.29, bitcoin pulled back to $76,500 from above $79,000 earlier in the week, halting its rally from the late-March lows below $65,000. Those anticipating a swift rebound should note that recent economic data does not support a significant bullish move. The University of Michigan's Survey of Consumers revealed a record-low consumer sentiment index of 49.8, driven primarily by inflationary pressures related to the Iran conflict. Inflation expectations have also risen sharply, with the one-year gauge increasing to 4.8% in April from 3.8% the previous month, and long-term expectations reaching 3.5%, the highest since October 2025.
This surge in inflation expectations could limit the Federal Reserve's ability to signal interest-rate cuts, as additional monetary easing may reinforce inflationary pressures, potentially capping gains in bitcoin and other risk assets. Analysts warn that the long-term expectations move is the more critical data point for the Federal Reserve, as it assesses whether 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 pricing in a potential Bank of Japan rate increase in June.
Sustained ETF inflows remain crucial for supporting spot bitcoin prices, while coordinated industry efforts have helped DeFi tokens hold up better than the broader market. Bitcoin's hourly price swings since late March indicate an ascending trendline has been broken, with prices trading at a discount to their 50- and 200-hour averages, pointing to uptrend exhaustion and potential for a deeper price pullback.