Cryptocurrency markets slipped on Friday as renewed trade war fears and upcoming U.S. inflation data weighed on investor sentiment. President Donald Trump’s warning of additional tariffs on Canada and the European Union, should they engage in coordinated trade policies affecting the U.S. economy, triggered a broad risk-off reaction.
Major tokens including Dogecoin (DOGE), Ethereum (ETH), and XRP fell more than 5% during early Asian trading hours. The pullback followed a brief relief rally earlier in the week, with traders locking in profits ahead of Friday’s release of the U.S. Personal Consumption Expenditures (PCE) data—a key inflation gauge closely monitored by the Federal Reserve.
The CoinDesk 20 Index (CD20), which tracks a broad range of top digital assets, dropped 4.5% on average. Dogecoin led the losses with a 7% decline, while Toncoin’s TON stood out as the sole gainer in the top 20, rising 5% in the past 24 hours.
Traditional markets reflected similar caution. Gold surged to a new high above $3,109 in Asian trading, extending a rally that began in early March. Meanwhile, the MSCI World Index logged its longest losing streak in a month, and a regional Asian equities index was on track for its steepest one-day decline since late February, according to Bloomberg.
Adding to the tension, over $12.2 billion worth of Bitcoin (BTC) options are set to expire later today, with the “max pain” point—where most losses occur for options holders—at $85,000.
“Spot is trading sideways and open interest continues to decline, indicating weak short-term momentum,” said traders at Singapore-based QCP Capital in a Telegram broadcast. “With the PCE report due soon, we expect limited upside until there’s more clarity on Trump’s next move and the direction of monetary policy.”
The PCE index, which tracks inflation across a wide range of consumer goods and services, is a major input for the Fed’s interest rate decisions. A high reading could raise the likelihood of rate hikes to combat inflation, potentially dampening appetite for risk assets like bitcoin. Conversely, a softer print could open the door for rate cuts or policy easing, providing a boost to crypto markets.
The next PCE release is scheduled for March 28 and could trigger heightened volatility as traders adjust to its implications for the Fed’s stance.
In response to Trump’s trade remarks, Canadian Prime Minister Mark Carney said the U.S. was “no longer a reliable partner,” and that Canada would accelerate efforts to strengthen trade ties with other global partners.
“The global market remains extremely sensitive to major central bank policy moves, particularly from the U.S.,” said Innokenty Isers, CEO of crypto platform Paybis, in a Telegram comment to CoinDesk. “Bitcoin’s volatility makes it less attractive for risk-averse investors seeking an inflation hedge.”
He added, “If the trade war drags on and inflation rises, we may see reduced capital allocation to bitcoin as investors look elsewhere for safety.”
