Market participants are now focused on Friday’s Core PCE inflation report, a critical metric closely watched by the Federal Reserve, according to a trading firm.
Bitcoin (BTC) was down about 1% over the past 24 hours, while XRP (XRP) and Dogecoin (DOGE) each slipped roughly 2.5%, indicating a weak recovery rather than a strong rebound.
Markets were rattled late last week after U.S. President Donald Trump announced plans to raise tariffs on European imports to 50%, up from an earlier proposal of 20%.
“Bitcoin’s bounce came after Trump delayed the EU tariff hike, which initially triggered a sell-off over the weekend,” Jeffrey Ding, chief analyst at HashKey Group, told CoinDesk via Telegram.
“Traders are interpreting these macroeconomic developments as a boost to stability, fostering a risk-on mood — especially with MicroStrategy’s Michael Saylor hinting at new Bitcoin purchases,” Ding added.
The market steadied on Monday after Trump postponed the tariff implementation to July 9, following what he described as a “constructive call” with European Commission President Ursula von der Leyen.
However, Singapore-based QCP Capital cautioned in a market update Monday evening that this episode highlights how quickly policy shocks can disrupt market calm.
The implied volatility spread between July and June Bitcoin options — which surged above 2 vols last week — has narrowed to under 1 vol, signaling traders are closely watching for fresh market moves ahead of the new tariff deadline.
This volatility spread measures the difference in expected price fluctuations for Bitcoin in July compared to June, reflecting market sentiment on future uncertainty.
All attention now turns to Friday’s Core PCE inflation figure, a key inflation gauge excluding volatile food and energy prices, used by the Fed to guide monetary policy, the firm noted.
Despite ongoing uncertainty, inflows into spot Bitcoin ETFs remain steady. BlackRock’s IBIT has recorded 30 consecutive days of net inflows — a notable streak that underscores sustained institutional interest.
Still, crypto’s resilience has been relative rather than absolute. QCP highlighted a divergence as flows in traditional tech products, such as the TQQQ NASDAQ ETF, have turned cautious while crypto assets held firm.
“In an era marked by unpredictable policymaking,” QCP remarked, “crypto increasingly appears as the mature player at the table.”
