In the early hours of trading in Asia, Dogecoin (DOGE), ether (ETH), and XRP (XRP) fell by over 5% as investors took profits following a brief rally earlier in the week, with market focus shifting to the upcoming U.S. personal consumption expenditure (PCE) data expected later on Friday.
The major cryptocurrencies tracked by a broad spectrum indicator recorded an average decline of 4.5%, with DOGE leading the drop at 7%. In contrast, Toncoin’s TON was the sole token among the top 20 by market cap to gain, rising 5% over the past day.
Gold prices surged to new heights on Friday, climbing above $3,109 in the Asian morning session, continuing its remarkable ascent since early March. Additionally, the MSCI World Index faced its longest losing streak of the month, as noted by Bloomberg, and a regional index of Asian stocks was on track for its most significant decline since February 28.
More than $12.2 billion in bitcoin (BTC) options are set to expire later on Friday, with a max pain point pegged at $85,000.
“Current spot trading is sideways, and open interest continues to decline, reflecting a general sense of pessimism in the market,” said traders from a Singapore-based firm in a Telegram message. “With the PCE Index data coming out tomorrow, we believe any short-term gains may be limited as the market awaits clearer signals regarding Trump’s next actions in the escalating trade dispute.”
The PCE index provides insights into inflation (or deflation) across a wide variety of consumer expenses and shows shifts in consumer behavior.
This monthly report is known to influence the Federal Reserve’s interest rate decisions. High PCE readings indicate rising inflation, which may prompt rate hikes to stabilize the economy, subsequently diminishing risk appetite and putting downward pressure on bitcoin prices as investors gravitate toward safer assets.
On the other hand, low PCE figures could signal subdued inflation, potentially leading to rate cuts or stable monetary policy, which would enhance liquidity and support Bitcoin’s pricing as a speculative investment or an inflation hedge.
The forthcoming report, scheduled for March 28, could affect market sentiment, with bitcoin’s response likely relating to how the data adjusts Fed expectations — increased volatility often follows as traders realign their positions.
Markets have been under pressure since Thursday after President Trump indicated the possibility of harsher tariffs on Canada and the European Union should they collaborate and these policies affect U.S. economic activity. In response, Canadian Prime Minister Mark Carney remarked late Thursday that Canada would quickly seek to strengthen trade ties with other nations, as the U.S. is “no longer a reliable partner.”
“The global market is extremely responsive to monetary policies from major economies, particularly the United States,” commented the CEO of Paybis in a Telegram communication. “Given the comparatively higher volatility, risk-averse investors may opt for alternative inflation hedges rather than Bitcoin.”
“With the ongoing trade war and potential inflation looming, allocations towards BTC as a safeguard against economic uncertainty may decrease,” the CEO cautioned.