Investor focus is sharpening ahead of Friday’s Core PCE inflation report, a key data point closely monitored by the Federal Reserve to guide its policy decisions.
Bitcoin (BTC) experienced a slight 1% dip over the last 24 hours, while altcoins XRP (XRP) and Dogecoin (DOGE) each fell around 2.5%, signaling only a modest market recovery after recent turbulence.
The crypto market’s recent jitters stem from last week’s announcement by U.S. President Donald Trump, who proposed increasing tariffs on European imports from 20% to 50%, causing a sharp sell-off in risk assets including cryptocurrencies.
“Bitcoin’s recent rebound came after Trump delayed the tariff implementation, which initially rattled markets over the weekend,” said Jeffrey Ding, chief analyst at HashKey Group, in a Telegram message to CoinDesk.
“Traders interpreted this as a stabilizing factor, promoting risk appetite, further encouraged by MicroStrategy CEO Michael Saylor’s hints of additional Bitcoin acquisitions,” Ding added.
Trump’s decision on Monday to postpone the tariff hike until July 9, following discussions with European Commission President Ursula von der Leyen, helped ease market concerns.
Still, QCP Capital of Singapore cautioned that such policy shifts remind investors how quickly market calm can be disrupted.
Bitcoin’s July-to-June implied volatility spread, which surged above 2 vols last week, has now contracted below 1, indicating traders are bracing for potential movement as the tariff deadline approaches.
This volatility spread measures traders’ expectations of Bitcoin’s price swings between July and June, reflecting heightened caution.
All eyes remain on the Core PCE inflation data, which excludes volatile food and energy prices and is a crucial inflation gauge for the Fed’s policy framework.
Meanwhile, institutional interest in crypto remains steady, as evidenced by BlackRock’s IBIT ETF achieving 30 consecutive days of net inflows—a sign of persistent demand from institutional investors.
QCP also pointed out a divergence emerging between crypto and traditional tech sectors, with cautious flows in leveraged NASDAQ ETFs like TQQQ, while crypto assets have shown more resilience.
“In a time of unpredictable economic policies,” QCP concluded, “cryptocurrencies are increasingly seen as the stable players in the market.”
