Bitcoin Consolidates Near $90K Amid Volatility as Cooling PCE Inflation Fuels Risk-On Sentiment

Source: CryptoNewsNet Original Title: Bitcoin Consolidates Near $90K Amid Volatility as Cooling PCE Inflation Fuels Risk‑On Sentiment Original Link:

Global Markets Surge on ‘Greenland Framework’

Global markets shifted into a relief rally as trade war tensions began to lift. The recovery followed a geopolitical pivot where trade threats against European allies were withdrawn and de-escalation measures were implemented.

Bitcoin (BTC) spent the day in a tug-of-war between macro optimism and local resistance. After a sharp nosedive to $88,200, the top cryptocurrency clawed back to $90,000. The intraday action remained volatile. A mid-morning dip to $88,500 was quickly bought up, pushing the price to $89,250 by noon, a modest 2.2% recovery from 24 hours earlier. Despite this bounce, the weekly outlook remains heavy, with bitcoin down approximately 7% over the last seven days and its total market capitalization hovering just under the $1.8 trillion mark.

The stabilization in crypto mirrored a broader surge in traditional equities, with markets reacting positively to diplomatic frameworks announced alongside international security partners, which replaced military and tariff threats with a roadmap for cooperation.

Global Equity Performance and Risk Appetite

In Asia, Japan’s Nikkei 225 led the charge, surging 1.73% (914.25 points) to close at 53,688.89. Hong Kong’s Hang Seng followed with a modest gain of 0.17%. In Europe, the FTSE 100 edged up 0.12% to 10,150.05.

In the U.S., Wall Street saw a decisive “risk-on” move. The Dow Jones Industrial Average climbed 423.73 points to 49,500.96, while the S&P 500 rose 51.13 points to 6,926.75, and the Nasdaq jumped 1.01% to 23,459.84 as investors shook off the extreme rhetoric of previous days.

Bitcoin’s sideways movement coincided with the release of the Personal Consumption Expenditures (PCE) price index. The report offered a cooling narrative, with headline PCE landing at 2.8% and core PCE (which excludes food and energy) at 2.9%. As the Federal Reserve’s primary inflation metric, the PCE is favored over the Consumer Price Index (CPI) because it adjusts for shifts in consumer behavior.

Analysts note that while a 2.5% to 2.9% range is historically “neutral,” the combination of easing inflation and low jobless claims provides fresh ammunition to lobby for deeper rate cuts—a move the Fed has remained reluctant to make.

The Decoupling Debate

Meanwhile, bitcoin’s high correlation with the S&P 500 and Nasdaq during the first weeks of the year has reignited a fierce ideological divide. Critics contend that bitcoin’s tendency to move in lockstep with tech stocks “torpedoes” its claim as a safe-haven asset or “digital gold.” If it falls when trade tensions rise, they argue, it cannot be a hedge against systemic risk.

However, proponents maintain that this correlation is a symptom of institutional adoption and is only temporary. They argue that bitcoin’s long-term scarcity will eventually decouple it from traditional markets, allowing it to outperform all conventional assets as it has for the past decade.

Expectations for bitcoin have shifted from an “explosive rally” to a period of “prolonged consolidation.” While the geopolitical de-escalation provided a brief relief bounce to $90,000, consensus among technical and institutional analysts suggests that bitcoin is facing a difficult “mid-cycle” grind.

Short-term support is firmly established between $88,000 and $84,000, but technical analysts warn that a break below $84,000 could trigger a deeper “unwinding” toward $80,000. On the other hand, the major overhead resistance sits at the $98,400 level—the short-term holder cost basis—and the psychological $100,000 barrier. Until bitcoin reclaims these levels, the market remains in a “fragile recovery” phase similar to early 2022.