Crypto Markets Navigate Tariff Threats and Await Key Economic Signals

The cryptocurrency market demonstrated notable resilience, closing the week with relative stability despite renewed geopolitical tensions surrounding international trade. Bitcoin (BTC) experienced a minor downturn, with the BTC/USDT pair trading around $105,398, reflecting a modest 1.7% decrease over 24 hours. The digital asset navigated a tight range, with a 24-hour high of $107,437 and a low of $105,329, indicating a period of consolidation. This steadiness was largely mirrored across the broader crypto landscape, which remained mostly unfazed by President Trump's announcement of terminating trade discussions with Canada over a proposed Digital Services Tax and the looming July 9 deadline for reciprocal tariffs. This market composure suggests traders are currently weighing macroeconomic indicators more heavily than geopolitical rhetoric. According to analysis from Coinbase, the market has largely disregarded the potential economic risks, possibly because the immediate impact has not yet materialized in economic data.

Crypto Stocks and AI-Related Moves Show Divergence

In stark contrast to the digital asset market's calm, crypto-related equities faced significant selling pressure. Shares of the cryptocurrency exchange Coinbase (COIN) dropped by 6%, while the stablecoin issuer Circle (CRCL) saw a more dramatic 16% decline in a single day. Circle's stock has been particularly volatile, now down approximately 40% from its peak earlier in the week. This divergence highlights a potential decoupling of sentiment between direct crypto asset holders and equity investors in crypto-adjacent companies. Meanwhile, the Bitcoin mining sector presented a mixed picture. While Hut 8 (HUT) fell 6.5%, Core Scientific (CORZ) remained relatively stable after its explosive 30% rally on Thursday. That surge was fueled by a report that AI firm CoreWeave was exploring a potential acquisition of the mining company, underscoring the growing intersection of AI infrastructure demand and the energy capabilities of Bitcoin miners. This AI narrative continues to create unique, event-driven trading opportunities within the mining sub-sector, independent of broader market trends.

Bitcoin's Resilience Tested as Traders Eye Fed's Next Move

As the market moves into a new week, the primary focus for traders shifts from tariffs to monetary policy. Bitcoin has successfully maintained its position above the crucial $100,000 psychological support level throughout recent market tests, a sign of underlying strength. However, its next major directional move will likely be dictated by two pivotal events: Federal Reserve Chairman Jerome Powell's semi-annual testimony to Congress and the release of the core Personal Consumption Expenditures (PCE) price index. The ETH/BTC pair, often seen as a barometer for risk appetite within crypto, showed some weakness, falling 1.9% to 0.02275, suggesting that while Bitcoin holds firm, traders may be rotating capital away from more speculative altcoins. Conversely, some assets like Avalanche (AVAX) showed exceptional strength against Bitcoin, with the AVAX/BTC pair surging over 6.7% to 0.0002267, indicating strong pockets of bullish sentiment exist for specific projects.

Powell's Testimony and Interest Rate Speculation

All eyes will be on Chairman Powell as he addresses Congress. While he is expected to maintain the Federal Reserve's official stance of data-dependency and political independence, traders will be parsing every word for hints of a dovish pivot. Recent comments from Fed Governor Christopher Waller suggesting a rate cut could be considered as early as July have already fueled market optimism. Chris Weston, head of research at Pepperstone, noted on X that emerging cracks in the labor market and weak housing activity provide grounds for the Fed to consider a dovish shift, potentially guiding towards a rate cut in September. Any confirmation of this sentiment from Powell could significantly de-risk the environment for assets like Bitcoin and Ethereum (ETH), potentially triggering a new wave of investment into the crypto space as borrowing costs are anticipated to fall.

The week's economic calendar culminates with the release of the core PCE data, the Fed's preferred measure of inflation. The market consensus is for a benign 0.1% month-over-month increase, which would reinforce the case for imminent rate cuts and likely be bullish for risk assets. However, some analysts urge caution. Experts at ING have pointed out that the full inflationary impact of potential tariffs may not be felt until July, which could complicate the Fed's decisions. They maintain a view that clarity on the inflation trajectory may not arrive until the December FOMC meeting, potentially leading to just one, albeit larger, 50 basis-point rate cut this year. This uncertainty creates a complex trading environment where Bitcoin's price action will be highly sensitive to whether the incoming PCE data confirms the dovish narrative or gives the Fed reason to pause.