This excerpt is from the CoinDesk newsletter 'Daybook.' To stay updated, sign up here. Bitcoin reached $77,400, rising alongside other risk assets following the release of earnings reports from major US tech companies, which helped stabilize the market. The gains followed Apple's earnings report, which, along with those from Google's parent company Alphabet, Microsoft, Meta, and Amazon, showed double-digit revenue growth.
These reports enhanced market sentiment, pulling investors back into equities and crypto, though the current bounce is attributed more to relief buying than the conviction that a new rally has begun. According to a note from crypto exchange Mercado Bitcoin, the market is experiencing short-term pressure due to mixed structural factors, including decreased hopes for rate cuts, outflows from ETFs, and increased geopolitical risk.
Despite oil prices surging and over $400 million in outflows from spot bitcoin ETFs at the end of April, crypto prices have held steady. The ongoing conflict in Iran and disruptions in the Strait of Hormuz could lead to higher crude prices, feeding inflation and making central banks less inclined to cut interest rates, which could negatively impact crypto and other risk assets by making cash and bonds more appealing.
The Federal Reserve's decision to maintain rates at 3.50% to 3.75%, with four dissenting voices, led markets to reevaluate policy expectations. Rony Szuster, Mercado Bitcoin's head of research, noted, 'In the short term, the market is expected to remain volatile and highly reactive to economic data. 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, which could introduce volatility due to Warsh's preference for tightening monetary policy, the key test for bitcoin remains at $80,000. A break above this level could attract new buyers, while a failed attempt may trigger selling if leveraged long positions are unwound.
For further 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.' Current trends and signals indicate the weekly bitcoin price is testing resistance at $80,000, with the RSI showing early signs of a bullish divergence, although this remains unconfirmed on a weekly close. Failure to break above $80,000 could keep the price within the range bounded by the 200-day exponential moving average of about $68,000 and the $80,000 level.