While the cryptocurrency market is known for its volatility and potential price spikes, the correction experienced this weekend appeared to shake confidence in the market as a whole. Prices were under increasing pressure following news of the new Omicron variant and the reaction seen in stock markets as many of them retreated below previous support levels, and over the weekend we saw a 20-30% drop in most major coins, including Bitcoin. Today the situation appears quite uncertain as BTC trades around $47,000 and as investors focus on headlines to ascertain the severity of the matter. One thing to note is that although prices dropped across the board, a look at the ETH/BTC chart indicates that a significant part of the money flowed into Ethereum rather than into the main crypto and we actually saw BTC dominance drop to the lowest level in several months. While this could point to the beginning of a new cycle in the crypto market, it remains unclear how investors will react to future price swings in this already puzzling environment.

UK Construction PMI and Car sales point to improving conditions

Today's IHS construction data showed the fastest increase in construction output for four months, driven partly by robust and accelerated rise in commercial work along with a drop in the number of firms reporting supplier delays and as input cost inflation dips to seven-month low. While these are all positive signs for the economy, pressure remains on the BoE to keep monetary and fiscal policy under control and to facilitate the continuation of the post pandemic recovery despite potential unexpected events.

Today’s car registration figures paint a slightly different picture of the current situation in the UK economy with figures showing an increase of around 1.7% on a monthly basis and a return to the level seen last november. However, as inflation pressures continue and as uncertainty related to the new variant increases, we could be seeing an impact on multiple sectors of the economy, including car sales and registrations as consumers worry about rising costs.