The crypto market is giving investors no hope of recovery as the price of Bitcoin returns from its recent gain. In the meantime, futures trading remains the best way to gain from the crypto ecosystem.

Experts in the crypto world revealed that the current market situation results from several macroeconomic factors. These factors include the ongoing war between Ukraine and Russia and inflation. In addition, governments’ expenses have also increased since the break of the Covid-19 up to now.

Another notable factor is the interest rate hikes of the Fed and European Central Bank (ECB). Unfortunately, for now, only imagination can speak for most crypto investors.

Charles Schwab’s Affect On Bitcoin Price

Bitcoin has witnessed some gains in the past few days, which looked like a good sign for a green market. But in the last 24 hours, it dropped again by 1.39%. Bitcoin currently trades at $19,215.63 at the time of writing.

According to Charles Schwab, this might be the beginning of another dip in the crypto market due to the anticipated recession. As a result, he warns investors that they should prepare for another bearish movement in the crypto market.

Possibility of The 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 dropped to a critical level.

He explained that the OECD leading indicator is currently at a dangerous area, below 99. This is a clear indication of a global recession. He pointed to some past instances when the index dropped below this territory.

According to him, the global economic recession that took place in 2020 was a result of Covid-19. His instances dated far back to mid-1970 and 1974, late 1981 and 1990, and early 2002 and 2008.

The leading indicator revealed significant unsteady business activity and a shift in the broader economy. The present level of the OECD indicator also shows that the consumer confidence index is worse than some past events. These include the subprime mortgage crisis in 2008 and the global pandemic in 2020.

Some organizations, like the World Bank, have also predicted a recession in 2023. It stated that the expected recession is due to the hawkish policy of the European Central Bank and that of the Fed.

BTC Performance During Recession

There’s no confirmation regarding the possible movement of Bitcoin during the expected recession. However, chances are that it could appreciate as a result of quantitative easing. But this is only possible if the Fed pulls off a strategy to handle the demand slowdown.

On the other hand, it’s also possible for BTC to dip even further due to the recession. The main reason is that stock markets barely perform well during the recession, and Bitcoin is no exception.

Featured Image From Pixabay, Charts From Tradingview

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.