Bitcoin traded below $65,000 as fresh economic data reignited stagflation concerns, creating a divergence between crypto and traditional assets. US PMI (Purchasing Managers' Index) readings signaled weaker economic activity, triggering market anxiety about simultaneous slow growth and persistent inflation. This combination historically pressures risk assets, yet Bitcoin showed resilience by holding support above key levels rather than capitulating sharply.
The data mismatch matters because Bitcoin typically decouples from stocks during periods of genuine macro uncertainty. While equities and gold moved in tandem, Bitcoin remained range-bound, suggesting market participants positioned defensively but stopped short of liquidating. The compression reflected traders caught between two narratives: stagflation argues for risk-off positioning and reduced asset prices, while Bitcoin's scarcity narrative appeals to inflation hedging during economic weakness.
PMI deterioration specifically points to manufacturing and services slowdown in the US economy. Lower PMI usually precedes Fed rate cuts, which theoretically helps Bitcoin by reducing borrowing costs and loosening monetary conditions. However, stagflation scenarios complicate this dynamic because central banks face a dilemma between fighting inflation and supporting growth. This policy paralysis creates uncertainty that typically benefits neither equities nor Bitcoin immediately.
Bitcoin's behavior under $65,000 suggests the market awaits clearer signals before committing directionally. Support held near $63,000-$64,500 range, while resistance clustered around $66,000-$67,000. Volume remained relatively subdued, indicating institutional players adopted a wait-and-see posture pending economic data confirmation or Fed communications.
The divergence from stocks and gold became notable because Bitcoin normally correlates with risk sentiment. That correlation breaking down in the face of stagflation warnings suggests either Bitcoin bulls see protection value in the asset, or the market simply lacks conviction to move decisively. Either way,