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Bitcoin Slips plunges to $20K: chances of recession are high

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A small relief rally appeared to reverse recession fears in the larger global markets, as Bitcoin (BTC) dropped to below $20,000 during Asian trading hours on Wednesday.

High recession risk

The bear market won’t end until a recession really occurs or the chance of one is eliminated, according to a report from Morgan Stanley. 

On Tuesday, Morgan Stanley and Goldman Sachs analysts issued a warning that “recession risks were not fully priced in,” which led to the slide.

Stock traders, according to Goldman Sachs, are pricing in a little recession, “leaving them susceptible to a further worsening in expectations,” they warned.

Separately, Citibank estimated that there is a roughly 50% chance of a worldwide economic crisis in the near future due to central banks “tightening monetary policy” and “weakening demand for products.”

Over the last several months, bitcoin has closely tracked larger markets. 

As a result, if broader markets continue to decline, bitcoin may follow suit in the coming weeks as traditional banks raise concerns about the status of the entire global economy.

According to Citi experts, supply disruptions for basics might increase prices and ultimately lead to a fall in the economy. According to Bloomberg, the team now predicts that the global economy will expand by 3% this year and 2.8% in 2023.

According to experts in the cryptocurrency sector, a long-term rebound in bitcoin prices wouldn’t occur until the world’s mood began to shift and there were signs of expansion.

Since Wednesday’s opening, the Hang Seng index in Hong Kong has decreased by 2.29 percent, the Shanghai Composite has decreased by 1.20 percent, and the Sensex in India has down by 1.29 percent. 

Germany’s DAX fell 2.9 percent, while the Stoxx 600 stock index also fell in Europe.

During the early morning hours in Europe, premarket futures for US stocks decreased. 

Nasdaq 100 futures, which are heavily weighted toward technology, fell 1.70 percent, while S&P 500 futures were down 1.56 percent. 

Futures for West Texas Intermediate crude oil decreased by 5%.

“Reached the bottom yet” 

According to experts in the cryptocurrency sector, a long-term rebound in bitcoin prices wouldn’t occur until the world’s mood began to shift and there were signs of expansion.

Andrey Diyakono, a chief business officer of Choice, stated in a Telegram message earlier this week that it is “foolish to ignore the bigger macro framework in which crypto and finance function.”

Additionally, Diyakono claimed that the market hasn’t “reached the bottom yet” and that recent issues at the cryptocurrency hedge fund Three Arrows Capital and the cryptocurrency lender Celsius Network have increased “crypto sector concern.”

At the time of publication, prices had fallen to a little over $19,900, a 4 percent decline in the previous day and a 7 percent decline in the previous week. 

ALSO READ: What made Crypto Miners start dumping out their high end GPUs?

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