Bitcoin, the crypto market leader, briefly topped $92700, extending the recovery from lows around $81500 on Tuesday

Both traditional and crypto markets have stabilized in the past 48 hours, but key volatility indices remain elevated, calling for caution for bulls who are expecting a steady move higher.

Both traditional and crypto markets have stabilized in the past 48 hours, but key volatility indices remain elevated, calling for caution for bulls who are expecting a steady move higher.

Bitcoin, the crypto market leader, briefly topped $92,700, extending the recovery from lows around $81,500 on Tuesday. MOVE, CRO, ONDO and Render traded 10% to 17% higher as of writing. Broadly speaking, AI, gaming and Layer 2 coins are the best-performing crypto sub-sectors for the past 24 hours.

The positive move could be attributed to rumors that President Donald Trump will unveil a U.S. strategic bitcoin reserve during Friday’s White House crypto summit. Meanwhile, hopes that Trump's tariffs will likely not endure have helped restore the risk sentiment on Wall Street and Germany and China's fiscal rockets have offered support to Asian and European equities.

Still, we haven't seen a notable decline in the volatility indices. At press time, Volmex's BVIV index, which measures the implied or expected 30-day price turbulence, held just five points below Tuesday's high of 66% but well above the February low of 49.6%. Perhaps traders see Friday's crypto summit as the make-or-break moment for crypto, as the President, having promised big for months, is now expected to deliver the goods as soon as possible.

In traditional markets, VIX, Wall Street's fear gauge, held at 23.65 Wednesday, the highest since mid-December, according to data source TradingView. Meanwhile, the MOVE index, which measures the 30-expected volatility in the U.S. Treasury notes, remained elevated at 104, the highest since November (check chart of the day).

The elevated volatility in bonds is particularly concerning as it is known to cause financial tightening and weigh over risk assets. For now, however, a weaker dollar seems to be compensating for that.

Still, the sticky vol indices in traditional markets raise an important question: Is the market's concern solely about tariffs, or are there underlying worries related to a significant slowdown driven by other factors such as potential fiscal consolidation?

The spread between yields on the U.S. 10-year Treasury note and the three-month Treasury bill has again turned negative, inverting the yield curve to suggest recession - consecutive quarterly contractions in the GDP. "[This is] generally not a good sign," Noelle Acheson, author of the Crypto is Macro Now newsletter said in Wednesday's edition.

Early this week, the Atlanta Fed's GDPNow model signaled a nearly 3% contraction in the U.S. GDP in the first quarter. The number is due for an update today. Recession fears will likely strengthen if we don't see an improvement today, potentially pressuring risk assets, including cryptocurrencies.

Acheson summed up the situation best: "We are still navigating the tussle between narratives – on the one hand, risk-off sentiment driven by macro uncertainty could keep BTC and other crypto assets depressed for a while. On the other hand, the “safe haven” narrative is gaining strength, as positive news from the White House highlights the astonishing shift in official support." Stay alert!