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Cryptocurrency pressured by weak US stock market

Bitcoin fell 2.02% against the dollar to $42,201 on Monday, January 17 as Americans celebrated Martin Luther King Day. Fixed income and stock markets were closed. The futures market saw subdued volumes amid holiday-thinned trading. Sellers ramped up selling of cryptocurrencies as soon as the futures on the S&P 500 index declined.

The price action slid to $41,540. Following a brief correction, BTC retraced to $41,453. Morning selling of bitcoin and other altcoins was triggered by a drop in US index futures, as well as an increase in UST yields. Yields on 10-year and 5-year US Treasuries hit new two-year highs on expectations for a rate hike by the Federal Reserve in March. According to the latest data from the CME’s FedWatch Tool, there is a 93.4% chance of a rate hike on March 16.

Bitcoin has a high positive correlation with the S&P 500 futures, so without news for the crypto industry, they are moving in the same direction. A strengthening dollar emboldens sellers. Until all Q4 2021 earnings reports are released, uncertainty will persist in the crypto market. Today we expect BTC to trade in a range of $41,275-$42600.

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