The cryptocurrency market demonstrated notable resilience, closing the week with relative stability despite renewed geopolitical and economic pressures. Bitcoin (BTC) registered a minor pullback, trading around $107,336 after a 1.2% dip over the last 24 hours. The digital asset fluctuated within a tight range, hitting a high of $108,746 and a low of $106,766, indicating a period of consolidation. Ethereum (ETH) followed a similar pattern, declining by approximately 1.2% to trade at $2,488, with its daily range spanning from $2,521 to $2,436. The broader digital asset market reflected this sentiment, with most major altcoins experiencing slight declines. However, some assets bucked the trend; Avalanche (AVAX) showed considerable strength against Bitcoin, with the AVAX/BTC pair surging over 6.7%.

Macroeconomic Headwinds and Market Divergence

This calm in the digital asset space contrasted sharply with the volatility seen in crypto-related equities. Coinbase (COIN) shares fell by 6%, while Circle's stock (CRCL) experienced a more dramatic 16% drop. This divergence highlights a growing disconnect where traders may be pricing in regulatory and business-specific risks for centralized crypto entities differently than for decentralized assets like Bitcoin. The market also largely shrugged off the announcement from the White House regarding the termination of trade discussions with Canada over a proposed Digital Services Tax. The threat of new tariffs, expected within a week, has historically been a catalyst for market volatility. However, according to analysts at Coinbase, markets seem to have disregarded the potential economic risks, partly because the immediate impact has not yet been reflected in key economic data. This market complacency may persist, as the inflationary effects of such tariffs are not anticipated to be as severe as previously feared.

AI Sector Buzz and Miner Stability

In a related development, the intersection of AI and cryptocurrency continues to generate significant interest. Bitcoin miner Core Scientific (CORZ) saw its stock remain relatively stable after a massive 30% surge on Thursday. The spike was fueled by reports of a potential acquisition by AI hyperscaler CoreWeave. This event underscores the increasing institutional interest in the infrastructure supporting the digital economy, including both AI computation and Bitcoin mining. While CORZ held its gains, other miners like Hut 8 (HUT) saw a 6.5% decline, suggesting a mixed but watchful sentiment across the mining sector as it navigates both market dynamics and strategic corporate activities.

The Week Ahead: Powell's Testimony and Key Inflation Data

Looking ahead, traders are bracing for a week packed with market-moving events, chief among them being Federal Reserve Chairman Jerome Powell's semi-annual monetary policy testimony before Congress. Powell is expected to maintain the Fed's data-dependent stance while facing questions about the path of interest rates. Any dovish hints could inject liquidity and risk appetite into the markets, potentially benefiting assets like Bitcoin. 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 lead the Fed toward a dovish shift. The swaps market is already pricing in a potential rate cut in September.

The week's most critical data release will be the core Personal Consumption Expenditures (PCE) price index, the Fed's preferred measure of inflation. The consensus forecast is for a modest 0.1% month-on-month increase, which would support the case for rate cuts. However, analysts at ING caution that the inflationary impact of potential tariffs could become more apparent from July onwards. The 90-day pause on reciprocal tariffs is set to expire on July 9, and if implemented, these could complicate the inflation narrative. While markets currently anticipate two 25-basis-point cuts this year, the ING team suggests clarity may not emerge until December, potentially resulting in a single, larger 50-basis-point cut if the job market continues to weaken. Traders will be closely monitoring these developments, as the interplay between monetary policy, inflation, and trade tensions will undoubtedly shape the direction of BTC and the broader crypto market in the coming weeks.