The relief rally that lifted crypto off last week's lows is unwinding alongside tech stocks and gold, with traders bracing for a US inflation print and a Warsh Fed that may stay hawkish.
What to know : Bitcoin and gold are falling together as expectations for higher interest rates sap demand for non-yielding assets, with bitcoin down nearly 7 percent on the week and gold slipping below $4,200 an ounce. The latest crypto pullback appears driven by a short squeeze rather than fresh buying, as more than $500 million in bearish bets were liquidated and spot demand, including from U.S. bitcoin ETFs, has yet to return meaningfully. Traders are watching Wednesday’s U.S. inflation report and its implications for Federal Reserve policy, as a hotter reading could keep rates elevated, pressure risk assets further and weaken bitcoin’s case as a macro hedge if gold stabilizes while it continues to slide.
