Big Tech Earnings Saved It…Bitcoin Starts Rising Again

▲ Bitcoin (BTC), NASDAQ/ChatGPT Generated Image ©

Bitcoin has rebounded, recovering to $76,000 again, but its upward momentum still appears to be heavily influenced by macroeconomic variables.

According to investment media outlet FXStreet on May 1 (local time), Bitcoin (BTC) re-crossed $76,000, boosted by strong earnings from major Big Tech companies. Risk asset preference sentiment, sparked on Wall Street, spread to the cryptocurrency market, leading to a price rebound.

This surge followed major companies, including Google's parent company Alphabet, Amazon, Microsoft, and Caterpillar, announcing earnings that exceeded expectations. In particular, the growth of cloud businesses driven by expanding artificial intelligence (AI) demand stimulated investor sentiment, causing the S&P500 index to rise by 73 points and other major indices like Nasdaq to also climb.

Amidst this trend, Bitcoin once again confirmed its high correlation with technology-focused indices. Recently, BTC has moved in a similar direction to tech indices like Nasdaq, showing strengthened linkage with traditional financial markets. While expectations of 'decoupling' were raised at one point due to its relative strength during the US-Iran conflict, this rebound shows it once again following the trend of risk assets.

However, it is uncertain whether the upward trend will continue. Geopolitical tensions in the Middle East and inflationary pressures continue to weigh on the market. In particular, the significant divergence of internal opinions within the Federal Open Market Committee (FOMC) during the Federal Reserve's interest rate freeze process increases uncertainty regarding policy direction.

Analysts at Bitunix stated, "The market is currently more concerned about the possibility of stagflation with persistent inflation than a simple recession. In this scenario, expectations for interest rate cuts could weaken, and risk assets, including Bitcoin, might see limited upward movement amid high volatility." Indeed, US Treasury yields remain high, and expectations for interest rate cuts have not significantly expanded.

Currently, Bitcoin is trading at approximately $76,400, up over 1% in 24 hours. However, the market continues to exercise caution, seeking to confirm changes in the macroeconomic environment, separate from the short-term rebound.

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