The DOW Jones, the NASDAQ, and the S&P 500 - the main US stock indices - closed lower on Friday. All three indices are approaching their swing lows recorded this January. Firstly, a correction in the US equity market might last throughout the whole of 2022. Secondly, the escalation of tensions in Western Europe has become an additional factor for a fall in risk assets. From all the above, there is a strong likelihood of a further drop in prices. The situation in Ukraine was relatively stable at the weekend. Overall, it did not improve whatsoever. Shelling in Donbass continues. The Western media gives new dates for Russia's invasion and even publishes strategic maps. The evacuation in Donbas was abrupt and brief. World leaders continue to call on the parties to find a diplomatic solution to the conflict. Moscow's rhetoric has not changed. Markets express deep concern about the aggravation of tensions between Russia and Ukraine and expect military action.
Naturally, this is weighing on the cryptocurrency and equity markets. The markets have been bearish in recent weeks and the situation is unlikely to improve until the Ukrainian crisis is resolved. In addition, risk assets are feeling pressure amid the upcoming rate hike by the US Federal Reserve. The regulator is expected to raise interest rates at the March meeting and hike them throughout 2022. Notably, this is more a plan than just market expectations and it has found support from FOMC members. So, there have been two major factors behind the bearish equity and cryptocurrency markets.
