Bitcoin's value is decreasing. The cryptocurrency market is anticipating the Federal Reserve's meeting next week.

 

Bitcoin and other cryptocurrencies fell on Friday as digital assets traded in a narrow range, with market players looking ahead to the Federal Reserve's meeting next week as a source of concern.

Bitcoin's price has dropped more than 2% in the last 24 hours, reaching below $39,000. The most popular cryptocurrency continues to trade in a narrow range around $40,000, but it remains unpredictable, dipping as low as $38,000 in recent days and changing hands for $43,000 only a week ago.

According to Joe Haggenmiller, the head of markets at crypto trading firm XBTO Group, "price volatility in the bitcoin market during the previous several weeks can be traced primarily to its link to other risk assets." "Despite rising concern across all risk-on asset markets, bitcoin has recently been pretty stable in the $38,000 to 41,000 area."

Bitcoin and other digital assets should move independently of traditional financial markets in principle, however they have been found to be connected with other risky assets such as equities, particularly technology companies. The Nasdaq Composite index, which is heavily weighted in technology, has had a difficult start to 2022, and was set to finish out its worst four-month start to a year since 1973 on Friday.

"In response to conflict in Ukraine, supply chain issues due to rising Covid-19 cases in China, and ongoing interest rate hikes and future balance sheet machinations by the Federal Reserve," Haggenmiller said, "macro uncertainty has driven all risk-on assets downwards over the last few months, including bitcoin."

Ether, Bitcoin's smaller rival, was also down. The Ethereum blockchain network's native token plummeted 2.5 percent to below $2,900 after reaching a high of $3,150 last Thursday.

Smaller cryptos, known as "altcoins," were considerably worse off. Luna has down 7%, while solana and cardano have both dropped 4%. Shiba inu was down 4%, while dogecoin was down 3%. "Memecoins," as they're nicknamed since they were originally meant as online jokes rather than serious blockchain projects, were also down.