Will Bitcoin Tank Track the Charles Schwab Indicator? Do BTC investors need to worry?
The crypto market does not give investors any hope of recovery as the price of Bitcoin recovers from the recent gains. Meanwhile, futures trading remains the best way to profit from the crypto ecosystem.
Experts in the crypto world revealed that the current market situation is due to several macroeconomic factors. These factors include the ongoing war between Ukraine and Russia and inflation. In addition, government spending has also increased since the outbreak of Covid-19 until now.
Another notable factor is the rate hikes by the Fed and the European Central Bank (ECB). Unfortunately, for now, only the imagination can speak for most crypto investors.
Charles Schwab’s Impact on Bitcoin Price
Bitcoin has witnessed some gains in recent days, which looked like a good sign for a green market. But in the last 24 hours it fell again by 1.39%. Bitcoin is currently trading at $19,215.63 at the time of writing.
According to Charles Schwab, this could be the beginning of another fall in the crypto market due to the expected recession. As a result, he warns investors that they should prepare for another bearish move in the crypto market.
Possibility of recession
Charles Schwab’s Chief Global Investment Strategist, Jeffery Kleintop, revealed the possibility of the predicted recession. He stated that a significant global economic indicator has fallen to a critical level.
He explained that the OECD’s leading indicator is currently in dangerous territory, below 99. This is a clear indication of a global recession. He pointed to some previous instances when the index fell below this territory.
According to him, the global economic recession that took place in 2020 was a result of Covid-19. His occurrences date back as far as mid-1970 and 1974, late 1981 and 1990, and early 2002 and 2008.
The leading indicator showed significant volatility in business activity and a shift in the broader economy. The current level of the OECD indicator also shows that the consumer confidence index is worse than some previous events. These include the 2008 subprime mortgage crisis and the 2020 global pandemic.
Some organizations, such as the World Bank, have also predicted a recession in 2023. It stated that the expected recession is due to the hawkish policies of the European Central Bank and the Fed.
BTC performance during recession
There is no confirmation of the possible movement of Bitcoin during the expected recession. However, chances are high that it could appreciate as a result of quantitative easing. But this is only possible if the Fed follows a strategy to deal with the decline in demand.
On the other hand, it is also possible for BTC to fall even further due to the recession. The main reason is that stock markets hardly perform well during recessions, and Bitcoin is no exception.
Featured Image From Pixabay, Charts From Tradingview
