Bitcoin falls to lowest level amid hawkish Fed, Kazakhstan unrest

Largest cryptocurrency falls below $42,000 on Friday

Bitcoin continued its losing streak on Friday, dropping to its lowest level in three months on the back of hawkish US Federal Reserve commentary and unrest in Kazakhstan.

The world’s first cryptocurrency was priced at a little over $41,538 at 11:30 am, falling by 3.81 percent in 24 hours, according to Coinbase. It’s the lowest price since September 30, 2021.

Other cryptocurrencies also posted declines, with Ethereum down 8.64 percent at $3,177.03 and Tether registering a .02 percent fall at $1.

Digital currencies started to fall sharply on Thursday after the latest minutes from the Fed meeting indicated that interest rates may be raised sooner than expected, prompting investors to turn to riskier assets.

The recent violent protests in Kazakhstan have also made crypto investors on edge, as protests over a rise in energy prices led the country’s leaders to shut down Internet service.

“[The] hawkish FOMC minutes, coupled with news about the Kazakhstan government resigning has given bears new reasons to sell. The current drop in Bitcoin and other altcoins on the back of FOMC minutes highlights the critical role of free money and excess liquidity in these markets,” noted Vijay Valecha, Chief Investment Officer at Century Financial.

“Bitcoin mining activity was further affected by Kazakh telecom shutting down the country’s internet owing to national security concerns.”

He noted that the value of Bitcoin has already dropped below its long-term 200-day moving average, suggesting a “bearish phase”.

“Ethereum is 5 percent away before this meaningful average is breached. The next major support lies near the late September lows,” Valecha added.