Bitcoin fell 3.06% to $42,560 on Thursday, January 13. The pullback was 4.35% from a high of $44,500. The cryptocurrency market came under pressure due to a decline in US stock indices. The tech sector was hardest hit, with the Nasdaq retreating 2.5% to $14,806.81, while the S&P 500 dropped 1.42% to 46,50.02.
Investors started to sell shares on the heels of remarks by Fed Governor Lael Brainard. She said the central bank could start to lift interest rates as early as March to ensure that generati0n-high price pressures will be brought under control. BTC is a risk-sensitive asset, so the sell-off of equities immediately hits cryptocurrency painfully.
After a slight consolidation in the range of $42,311-42,978, the downtrend in BTC increased to $41,827. On the one hand, the fall in the form of a three-wave structure fits perfectly into an upward correction from $39,650 to $44,500 (+12.2%). The retreat was slightly more than 50%.
During European trading, the dollar index recovered to 94.87. The dollar is strengthening ahead of the release of US retail sales and industrial production for December and University of Michigan consumer confidence for January.
This macro data will exert an impact on the FX and stock markets. Buyers need to close the day above $43k, otherwise the move will fit within the daily downtrend again with expectations for a dip below $40k.