Bitcoin and US stocks gain as PCE inflation meets expectations

Bitcoin and U.S. equities made moves upwards on Friday as the latest Personal Consumption Expenditures (PCE) index showed inflation rising in line with expectations, reinforcing investor optimism about potential Federal Reserve rate cuts later in the year.

The PCE index, the Fed’s preferred measure of inflation, rose 0.3% in December, marking the largest monthly increase since April. On a year-over-year basis, inflation edged up to 2.6%, further confirming a gradual cooling trend but remaining above the Fed’s 2% target, according to according to the U.S. Bureau of Economic Analysis . Despite the uptick, short-term inflation trends suggest gradual progress, with core prices rising just 2.2% over the past three months.

Bitcoin climbs above $105,000

Bitcoin posted a move upward, trading above $105,000, as crypto markets responded to the PCE data and risk-on sentiment in equities. Bybit's latest crypto derivatives report highlighted bitcoin's open interest structure, revealing a continued decline in both realized and implied volatility since the DeepSeek-induced market sell-off earlier this week.

"Volatility has continued to decline in both realized and implied terms, and short-tenor options are exhibiting lower volatility with a neutral skew, while longer-dated volatility smiles maintain a bullish bias towards out-of-the-money (OTM) calls, continuing a trend seen since the election," the Bybit said.

Ether also maintained strong momentum, with options trading volume at monthly highs and open interest heavily weighted toward calls, the report said. While ether's spot price recovery has lagged that of BTC, the options market remained resilient, suggesting bullish positioning for future gains.

The Bybit report said that solana options open interest shows protective put buying, suggesting strategic hedging of prior gains.

"Solana open interest in puts and calls remains elevated, with trading activity surpassing pre-rally levels," the Bybit report stated. "Stable levels of newly opened put options suggest strategic protective buying to hedge profitable long positions in other instruments."

Optimistic end of the week for equity markets

Wider markets responded positively to the PCE data, which aligned with forecasts and showed no signs of inflation reaccelerating. Wall Street’s main indexes climbed on the last day of trading for the week, bolstered by Apple’s strong sales outlook. The tech firm reported on Thursday record revenue of $124.3 billion for its fiscal first quarter, covering the three months ended in December, despite slightly weaker-than-expected iPhone sales.

The SP 500 rose 0.4% in early trading, positioning itself for a modest 0.1% weekly decline despite Monday’s sharp drop amid concerns that artificial intelligence-linked stock could be overvalued after the disruption caused by the debut of DeepSeek's new, cheaper and potentially more efficient, large-language model. Additionally, the Dow Jones Industrial Average was up 87 points, or 0.2%, while the Nasdaq Composite gained 0.9%.