The cryptocurrency market demonstrated notable stability to close the week, largely shrugging off renewed geopolitical trade tensions as traders shift their focus to critical upcoming macroeconomic events. Bitcoin (BTC) has been consolidating in a tight range, with the BTC/USDT pair trading around $107,177, marking a slight 1.15% dip over the last 24 hours. Price action saw BTC test a low of $106,766 before finding support, while resistance was met near the 24-hour high of $108,746. This relative calm persists despite announcements of escalating trade disputes, including a potential new U.S. tariff strategy aimed at Canada and a looming July 9 deadline for the expiration of a pause on reciprocal tariffs. According to a research report from analysts at Coinbase, financial markets have so far disregarded the potential economic risks, a sentiment of complacency that is expected to continue as these measures are not anticipated to be as inflationary as once feared.

Crypto Stocks and AI Hype Show Market Divergence

While the digital assets themselves remained steady, crypto-related equities experienced significant volatility, revealing a clear divergence in market sentiment. Major exchange stock Coinbase (COIN) saw a 6% decline, while stablecoin issuer Circle's stock (CRCL) plummeted 16%. The Bitcoin mining sector also presented a mixed picture. While Hut 8 (HUT) fell by 6.5%, Core Scientific (CORZ) held its ground after a spectacular 30% rally on Thursday. This surge was fueled by a report that AI hyperscaler CoreWeave was exploring an acquisition of the mining firm. This event underscores a powerful, ongoing narrative where the artificial intelligence boom is creating distinct and potent trading opportunities within the crypto ecosystem. Assets with direct or indirect links to AI infrastructure are attracting significant capital, often moving independently of broader crypto market trends.

Upcoming Macro Catalysts: Powell's Testimony and Rate Cut Speculation

Looking ahead, the market's attention is squarely fixed on a series of high-impact macroeconomic events. The primary focus will be the semi-annual monetary policy testimony from Federal Reserve Chairman Jerome Powell. Traders will be dissecting his every word for hints about the future path of interest rates. Market expectations are leaning dovish, buoyed by recent comments from Fed Governor Christopher Waller suggesting a rate cut could be on the table as early as July. This sentiment was echoed by Chris Weston, head of research at Pepperstone, who noted on X that emerging cracks in the labor market and weak housing activity could prompt the Fed to guide towards a September cut. Such a dovish shift would likely boost risk appetite across financial markets, providing a significant tailwind for assets like Bitcoin, which has managed to maintain its position above the crucial $100,000 psychological support level.

Pivotal Inflation Data: The Core PCE Release

Alongside Powell's testimony, the release of the core Personal Consumption Expenditures (PCE) price index—the Fed's preferred inflation gauge—will be a pivotal moment for markets. The consensus forecast is for a benign 0.1% month-on-month increase, which would reinforce the case for imminent rate cuts. However, not all analysts are convinced. In a note to clients, analysts at ING suggested that true clarity on the inflation trajectory, especially considering the potential impact of tariffs, may not emerge until the December FOMC meeting, implying just one rate cut this year. This highlights the central tension for traders: the market is currently pricing in a dovish Fed, but the latent threat of renewed inflation from trade tariffs remains a significant risk that could materialize later in the year.

Bitcoin's Key Levels and Altcoin Opportunities

For traders navigating this complex environment, Bitcoin's price action is defined by key technical levels. The immediate support zone sits near the recent low of $106,000, with the $100,000 mark serving as a more substantial psychological floor. On the upside, a clean break above the $108,800 resistance is needed to signal renewed bullish momentum. While Bitcoin consolidates, astute traders are finding opportunities in the altcoin market, where capital rotation is evident. Several major altcoins are showing remarkable strength against Bitcoin itself. The AVAX/BTC pair, for instance, surged by an impressive 6.73%, while the SOL/BTC and ADA/BTC pairs posted strong gains of 3.63% and 3.61% respectively. This outperformance suggests that a risk-on sentiment is building within specific ecosystems, offering traders a chance to capitalize on narratives like AI, decentralized finance, and layer-1 platform growth, even as Bitcoin awaits its next major macro catalyst.