The cryptocurrency market experienced a notable downturn on Friday, influenced by escalating geopolitical tensions and impending economic indicators that unsettled investor confidence. Dogecoin (DOGE) led the decline with a 6.97% drop, while XRP and Ethereum (ETH) fell by 7.20% and 6.91%, respectively. In contrast, Toncoin (TON) defied the trend, gaining 5% amid the broader sell-off.
The CoinDesk 20 Index, a benchmark for the cryptocurrency market, slid by 4.5%, reflecting widespread risk aversion. This decline coincided with U.S. President Donald Trump’s announcement of new auto import tariffs targeting Canada and the European Union. In response, Canadian Prime Minister Mark Carney indicated a strategic shift away from reliance on U.S. trade, further amplifying global market uncertainty.
Bitcoin Options Expiry Raises Volatility Concerns
Adding to market turbulence, over $12.2 billion in Bitcoin options are set to expire today. The max pain point—the price level where the most options expire worthless—is at $85,000, raising expectations for heightened Bitcoin price volatility. Currently, Bitcoin (BTC) is trading at $84,190, down 3.66% from the previous close.
PCE Inflation Data in Focus
Investors are closely monitoring the upcoming release of the U.S. Personal Consumption Expenditures (PCE) Index, a key inflation gauge for the Federal Reserve. Scheduled for later today, the data could significantly influence Fed rate decisions and investor appetite for risk assets like Bitcoin. A higher-than-expected PCE reading may reinforce inflation concerns, potentially leading to more hawkish monetary policy. Conversely, a weaker PCE figure could bolster expectations of rate cuts, possibly driving fresh capital into cryptocurrency markets.
Gold Reaches Record High as Investors Seek Safe Havens
As risk-off sentiment intensifies, gold surged to a record high of $3,109 per ounce during Friday’s Asian session. The SPDR Gold Shares ETF (GLD) reflects this trend, currently priced at $283.32, up 0.48% from the previous close. Meanwhile, global equities have slumped, with the MSCI World Index recording its longest losing streak in a month, and Asian stocks experiencing their worst single-day loss since February 28.
Bitcoin’s Role as a Hedge Faces Challenges
“Bitcoin’s volatility and current macro uncertainty could reduce its appeal as a hedge against economic instability,” said Innokenty Isers, CEO of Paybis. “If the trade war escalates and inflation rises, investors might turn to more traditional inflation hedges like gold.”
Market Outlook
Traders are now awaiting two key catalysts:
- PCE Inflation Data Release: The forthcoming data could set the tone for risk assets as the market moves into the second quarter.
- Further Trade Policy Announcements: Additional statements from President Trump may amplify volatility across both traditional and cryptocurrency markets.
As these events unfold, market participants remain vigilant, navigating the complex interplay of geopolitical developments and economic indicators.
