Bitcoin price today: Cryptocurrency near its 6-month low after weekend battering

Bitcoin price today: The dollar traded steady on Monday ahead of the U.S. Federal Reserve's January policy meeting later this week, while Bitcoin lay bruised near a six-month low hit over the weekend, hurt by a sell-off in technology stocks.

"The Fed has got markets by the leash. And this week, it will once more tug and yank," said Frederic Neumann, HSBC's co-head of Asian economics research, in a morning note.

Attempts to predict when and how quickly central banks will raise interest rates and conclude stimulus programmes launched when COVID-19 hit are a major factor driving currency markets at present.

"What will prompt investors to scurry about will be the guidance Chair Powell might give at his press conference about quantitative tightening later in 2022," Neumann said, adding that he was not expecting a policy change.

The Fed's rate-setting Federal Open Market Committee kicks off its two-day meeting on Tuesday with some analysts starting to speculate that it is possible, though unlikely, that it will raise interest rates for the first time since the pandemic began.

"We consider the higher risk is the FOMC’s statement portrays an urgency to act soon, likely in March, in the face of very high inflation. The urgency could culminate in a decision to abruptly stop quantitative easing by mid-February," said analysts at Commonwealth Bank of Australia in a note.

"A bullish statement and/or a faster end to the QE programme could even encourage markets to price a risk of a 50bp rate hike in March," they added, saying they thought this would lead to a knee-jerk reaction higher in the dollar.

The dollar index, which measures the greenback against six major peers was steady at 95.682 on Monday morning.

Also on traders' agenda this week is the Bank of Canada's January meeting, wrapping up just before the Fed, where a rate hike is a possibility, and Australian inflation data due Tuesday, which will guide the Reserve Bank of Australia's stance at its meeting next month.

On Monday morning the Aussie dollar was at $0.7180, the lower end of its recent range. The risk-friendly currency sold off late last week as traders dumped assets like equities, as well as even riskier assets like cryptocurrencies.

Bitcoin price was at $36,026, having fallen 10% on Friday and dropping as low as $34,000 on Saturday, its lowest level since July 2021.

The world's largest cryptocurrency has nearly halved in value since its record peak of $69,000 hit November.

The sell-off hurt most digital assets, and ether, the world's second-largest cryptocurrency was at $2,516, also having hit its lowest level since July on Saturday, which was $2,300.

Traders say that as institutional investors increase their exposure to cryptocurrencies, their moves are more closely correlated with other risk assets.

The Nasdaq Composite lost 7.55% last week, its worst week since March 2020.

Back in traditional currency markets, sterling was near a two-week low at $1.3551, and the euro was at $1.1333.

The yen was at the stronger end of its recent range, with one dollar at 113.7 yen not far from the 113.47 touched 10 days earlier. A fall below that level would be a five-week low for the dollar.