Bitcoin drops to 3 month-low after US Fed signals interest rate hike

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Bitcoin declined to three-month lows on Friday as minutes of the latest US Federal Reserve meeting raised the possibility the central bank could boost interest rates as soon as March, Barrons reported.

Bitcoin traded Friday at $42,086, down 2.1 per cent over the past 24 hours, according to CoinDesk. The world’s largest cryptocurrency fell to as low as $41,012, hitting the lowest level since September 29 and taking the weekly decline to 12 per cent, CoinDesk reported. Bitcoin’s record high is $68,990.90.

Ethereum, the second-largest digital currency, has declined 4.9 per cent over the past 24 hours to $3,231, the report said.

Analysts at Fundstrat said in a note that near-term technical and cycles for cryptocurrencies remain bearish, “and suggest further weakness might unfold into this Spring before any meaningful low is at hand”.

The analysts said key short-term support for Bitcoin is estimated at around $39,500, and then $29,000 “being more serious, as this held from May through July 2021”.

Bitcoin’s tumble followed the release on Wednesday of the Federal Reserve meeting minutes, which indicated that inflation readings and tight labour conditions could warrant an interest-rate increase “sooner or at a faster pace than participants had earlier anticipated”.

The central bank also hinted at a potential reduction of its $9 trillion balance sheet.

–IANS

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