The price of Bitcoin is continuing to decline, falling to $41,012 during Asia trading on Friday, the lowest level since 29 September.

This takes the weekly decline to 12%, according to data from CoinDesk.

The pace of the downward trajectory started to increase midweek after the minutes were published from the latest Federal Reserve meeting, indicating rate hikes could be on the cards sooner-than-predicted. 

“Bitcoin has been trading as a risk-of/risk-off asset lately and seems to be tracking equities lower,” Jeff Dorman, CIO at Arca, told CoinDesk. 

According to Laurent Kssis, a crypto exchange-traded fund (ETF) expert and CEC Capital director, around $200 million in long positions have been liquidated in a matter of hours, driving the spot price down. Kssis went on to add that we could see a drop under the $40,000 mark, particularly if bond yields continue to move up on the hawkish stance by the Fed.

“It’s time to evaluate the conviction you have in whether positive interest rates could damage equity portfolio and see further global downward pressures,” Kssis stated. “A 60/40 equities-to-bonds portfolio mix means that if the 60% in equities declines, big fund managers automatically sell bonds to maintain the ratio.

“So if the Fed allows equity prices to fall, it will increase the borrowing costs of the governments because as bond prices fall, yields rise!!! That could trigger more selling in BTC,” Kssis added.

Following the Fed meeting minutes published this week, deVere CEO Nigel Green said at the time: “The minutes from the Fed have increased expectations that the central bank of the world’s largest economy will now move faster to raise interest rates to fight soaring inflation.

“As a result, there’s been a knee jerk sell-off on Wall Street and the crypto market as it is perceived by some traders that such a move puts at risk the liquidity that has benefitted many asset classes, including Bitcoin.”
 
He added: “However, I believe that we will see Bitcoin robustly rebound as the dust settles. This will then boost others in the crypto market.”