The recent relief rally that lifted crypto off last week’s lows is now fading, moving in sync with declines in tech stocks and gold as markets position for upcoming U.S. inflation data and expectations that the Federal Reserve under Kevin Warsh may remain hawkish.

Bitcoin’s rebound from last week’s low is rolling over, with both BTC and gold moving lower together.

Bitcoin recently traded at $61,233, down 3% over 24 hours and 6.9% for the week. Gold also slipped about 2%, falling below $4,200 per ounce. Markets are increasingly pricing in higher interest rates, which tends to pressure non-yielding assets like Bitcoin and other cryptocurrencies.

Ethereum fell 3.4% to $1,625, while Solana dropped 4.1% to $64.24. XRP declined 4.3% to $1.12, and both BNB and Dogecoin lost under 3%. Hyperliquid’s HYPE token was the weakest among major assets, falling 10.2% on the day and 21.3% over the week, reflecting its higher-risk profile.

Equity markets also came under pressure. South Korea’s KOSPI index, heavily tied to the AI and semiconductor trade, dropped 6.3%, contributing to a 2.5% fall in MSCI’s Asia-Pacific index and marking its fourth decline in five sessions. Nasdaq 100 futures were also lower, down 0.8% after a volatile Wall Street session. Brent crude traded near $92 a barrel amid renewed U.S. strikes on Iran, while the 10-year Treasury yield climbed to 4.54%.

Gold and Bitcoin rarely move in the same direction, as both are non-yielding stores of value, but both are now weakening as rising rate expectations reduce demand for such assets. Wednesday’s U.S. inflation report could further reinforce that trend.

A stronger inflation reading would support expectations that Federal Reserve Chair nominee Kevin Warsh may keep rates higher for longer, tightening liquidity conditions that have previously fueled risk-asset rallies.

The recent bounce was largely driven by a short squeeze rather than fresh buying, with over $500 million in bearish positions liquidated—the largest since April.

However, some market participants say underlying spot demand has yet to return in strength.

“Buyers have stepped in after the move lower, but spot demand has yet to return in a meaningful way,” said Diana Pires, chief business officer at sFOX, pointing to continued outflows from U.S. spot Bitcoin ETFs that are keeping institutional participation subdued. Without sustained inflows, she added, rallies are struggling to hold.

Attention now turns to whether Bitcoin can hold support through the inflation print or continue tracking equities lower. If gold stabilizes while Bitcoin keeps falling, its role as a macro hedge could come under further question.