As traders brace for an upcoming US inflation report and anticipate a hawkish stance from the Federal Reserve, both bitcoin and gold are seeing declines from last week’s highs.
By Shaurya Malwa|Edited by Omkar GodboleUpdated Jun 10, 2026, 5:28 a.m. Published Jun 10, 2026, 5:22 a.m. 2 min readMake preferred onKey Points:
- Bitcoin and gold are both experiencing declines as rising interest rate expectations dampen interest in non-yielding assets; bitcoin has dropped nearly 7% this week, while gold has fallen below $4,200 per ounce.
- The recent downturn in crypto appears to be more related to a short squeeze than any new buying activity, with over $500 million in bearish positions liquidated and spot demand, particularly from U.S. bitcoin ETFs, not rebounding significantly.
- Market participants are closely observing Wednesday's U.S. inflation data and its potential impact on Federal Reserve policy; a stronger inflation report could maintain elevated interest rates, further pressuring risk assets and undermining bitcoin's appeal as a macro hedge if gold stabilizes while bitcoin continues to decline.
Bitcoin's BTC$62,194.32 rebound from last week’s low is faltering, and gold is following suit.
On Wednesday, BTC was trading at $61,233, reflecting a 3% decline over the past 24 hours and a 6.9% drop for the week, while gold decreased by 2% to below $4,200 per ounce. The market is anticipating higher interest rates, leading to a sell-off of assets like bitcoin and crypto that do not yield returns.
Ether (ETH) fell 3.4% to $1,625, and solana (SOL) decreased by 4.1% to $64.24, according to CoinDesk data. XRP (XRP) dropped 4.3% to $1.12, whereas BNB BNB$594.30 and DOGE$0.08336 each fell less than 3%. Hyperliquid's HYPE again faced the most significant loss among major cryptocurrencies, down 10.2% for the day and 21.3% for the week, trading at $55.52, reflecting its higher beta as risk sentiment waned.
In South Korea, the Kospi index, which is heavily influenced by the AI sector through its chipmakers, plummeted 6.3%, contributing to a 2.5% decline in MSCI's broad Asia-Pacific equity index, marking its fourth drop in five days. Nasdaq 100 futures indicated a 0.8% lower opening after a turbulent session on Wall Street. Brent crude was trading close to $92 per barrel due to renewed U.S. military actions against Iran, while the 10-year Treasury yield rose to 4.54%.
Typically, bitcoin and gold do not decline simultaneously, as both serve as stores of value that lack yield; thus, they lose attractiveness when traders anticipate rising rates, which is what Wednesday's U.S. inflation report could prompt.
A strong inflation reading would bolster the argument for new Federal Reserve Chair Kevin Warsh to keep rates elevated for an extended period, draining liquidity from assets that have thrived on low-interest rates.
The recent bounce seen earlier this week was attributed to a short squeeze rather than fresh market interest, with over $500 million in bearish positions liquidated, the highest since April.
Some analysts suggest that spot demand has not adequately supported this rise.
According to Diana Pires, chief business officer at sFOX, "While buyers have entered the market after the decline, spot demand has yet to return significantly." She noted a trend of outflows from U.S. spot bitcoin ETFs, which has made institutional investors wary. When new demand fails to match selling pressure, rallies struggle to maintain momentum.
Market participants will be watching to see if bitcoin can sustain its value ahead of the inflation report or if it continues to move in tandem with the Nasdaq. A stabilization in gold while bitcoin continues to drop would further weaken its standing as a macro hedge.
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