Bitcoin held steady above $87,000 during the Asian afternoon session on Wednesday as traders kept an eye on upcoming U.S. data releases and the implications of new U.S. tariffs set to take effect on April 2. Most participants are currently in a wait-and-see approach.
Major cryptocurrencies showed minimal change over the last 24 hours, with Solana’s SOL, XRP (XRP), BNB Chain’s BNB, and ether (ETH) each climbing by less than 3%. However, the memecoin dogecoin (DOGE) stood out with an impressive 5.5% increase.
This marked the second consecutive day of gains for DOGE, alongside ongoing increases in pepe (PEPE) and mog (MOG). These tokens have continued to demonstrate a trend of acting as a “beta bet” on the strength of ether, showing no signs of reversal.
In other news, shiba inu (SHIB) surged by 11%, driven by a shift towards riskier meme coins and a notable 228% rise in its native ShibaSwap exchange over the past month. According to data, open interest in SHIB-related futures has grown by more than 20% since Sunday, indicating expectations for increased volatility.
Concerns about a potential U.S. economic slowdown persist, as a quick unwinding of momentum trades in equities has pushed money managers into a more defensive stance.
“We anticipate that markets will continue to rebound gently from last week as we approach the end of the month, with the next significant catalyst being the ‘liberation day’ reciprocal tariff announcement from Trump scheduled for April 2,” said Augustine Fan, Head of Insights at SignalPlus, in a Telegram message to CoinDesk. “Rumors regarding a more lenient tariff response could significantly aid in recovering some of the recent technical damage in U.S. stocks, potentially initiating a global rally along with the recent surge in EU and Chinese stocks.”
“Cryptocurrency will likely continue to mirror equity markets in the near future, as we currently do not foresee any distinct catalysts emerging. Nonetheless, recent M&A announcements involving Coinbase and Kraken instill confidence that the long-term bull market remains intact,” Fan added.
Meanwhile, traders at QCP Capital noted in a Tuesday broadcast that both the upcoming quarter and the month of April historically represent one of the strongest periods for risk assets, second only to the festive December rally.
“The S&P 500 has consistently delivered an average annualized return of 19.6% in Q2, and Bitcoin has similarly recorded its second-best median performance during this timeframe, trailing only Q4,” QCP stated, acknowledging a degree of caution among options traders.
“Options markets are exhibiting caution. Call skew has not shifted significantly toward calls, with a noticeable inclination towards calls only expected to occur from June onwards, indicating that traders are biding their time to see how the tariff situation unfolds,” they observed, noting that attention is now focused on the upcoming Personal Consumption Expenditure (PCE) data, which could become the “next key catalyst.”
The PCE index measures inflation (or deflation) across a broad spectrum of consumer expenses and reflects alterations in consumer behavior.
Released monthly, the PCE is believed to influence the Federal Reserve’s interest rate policies. Elevated PCE readings suggest increasing inflation, which might prompt rate hikes aimed at cooling the economy, potentially dampening risk appetite and exerting downward pressure on bitcoin prices as investors gravitate towards saferassets. Conversely, low PCE figures imply subdued inflation, which might lead to rate cuts or stable policies, enhancing liquidity and supporting Bitcoin’s value as a speculative asset or inflation hedge.
The next PCE release is on March 28 and could significantly influence market sentiment, with bitcoin’s response linked to how the data shapes Fed expectations — volatility often ensues as traders re-evaluate their positions.
