As a broad sell-off intensified Friday, investors dumped cryptocurrencies and tech stocks as they prepare for the Federal Reserve to hike interest rates.
As of 3.45 a.m., the price of Bitcoin was $39,140.16 on the Coinbase exchange. Time. Over the last month, the biggest and oldest coin has fallen more than 20% and is close to its November record high.
It was down 7.8% to $2,894.41. It hit a record high of $5,000 in November, but has fallen over the last month.
In anticipation of the Fed withdrawing its support for markets and the economy in 2022, investors have been selling both cryptocurrencies and speculative technology stocks. The central bank is expected to raise rates four times this year.
Higher bond yields have made unprofitable tech companies look unattractive. Instead, investors have shifted their focus to sectors such as energy and finance that are more closely linked to the health of the economy.
Naeem Aslam, chief market analyst at AvaTrade, said that pessimism is growing among investors and traders when it comes to riskier assets.
The key support level of $40,000 was tested a few times before, and the price has violated it. The next two important price levels are $35,000 and $30,000.
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The impact of Fed policy and bond yields on the market has become a concern for the bulls.
"As long as rates go higher, we will see pressure on the exchanges," said Mike Novogratz. SkyBridge Capital boss Anthony Scaramucci said his investment firm is not buying the dip this time around.
The central bank's proposal to outlaw the mining and trading of cryptocurrencies was one of the factors weighing on prices, analysts said.
The complex was a sea of red on Friday. The third-biggest token, the Binance coin, was down close to 10%.
Aslam said investors are likely to buy into the weakness at some point, with many investors seeing digital assets as the currencies of the future.
"Smart money and other institutions are going to take advantage of the current price action, and they are likely to bag some great bargain."
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