The crypto market is struggling due to various macroeconomic factors. The price of Bitcoin continues to remain sluggish. BTC fell by over 2% in the last 24 hours and is trading at $19,177. The correction after the crypto rally has erased all the BTC gains. It is barely holding on to a 0.27% increase for the last 7 days. According to Charles Schwab, the worry for Bitcoin investors may just be beginning due to the recession.
Jeffrey Kleintop, the Chief Global Investment Strategist at Charles Schwab reveals that one of the leading indicators of the global economy has fallen to dangerous levels. He highlights that the OECD total leading indicators have fallen into dangerous territory. Kleintop believes that every time this index falls below 99, the global economy faces a recession.
He further elaborates that this indicator last fell below 99 in 2020, when the global economy faced a recession due to the pandemic. Similarly, it fell below 99 in early 2008, early 2001, late 1990, late 1981, mid-1974, and mid-1970.
It is currently below the 99 mark.
Is The Economy Entering A Recession
The composite leading indicator highlights a potentially major shift in the economic outlook. It also reveals any dangerous abnormality in global business activity. OECD data highlights that the consumer confidence index has fallen to an even worse level than the 2020 pandemic and 2008 subprime mortgage crisis.
The recently published Empire State Manufacturing Index also reveals an alarming fall in the manufacturing outlook in New York.
The World Bank has already highlighted that the global economy will face a major recession in 2023. The demand slowdown is a result of the hawkish policy guidance of central banks. The Federal Reserve has already stated that the cost of doing too little to curb inflation is higher than the cost of doing too much.
How Will Bitcoin Price Perform During Recession
Bitcoin was invented after the last major recession in 2009. Therefore, there is no hard evidence as to how the largest cryptocurrency will perform. If the Fed pivots to tackle the demand slowdown, Bitcoin prices can skyrocket due to quantitative easing.
However, the stock market does not typically perform well during a recession. Since Bitcoin is strongly correlated to the stock market, it can suffer heavy losses due to recession.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.