Bitcoin Slips to Nearly $20K, Citi Sees 50% Chance of Recession

Premarket futures for U.S. indexes fell, while Asian equities took a hit on Wednesday.

AccessTimeIconJun 22, 2022 at 8:11 a.m. UTC
Updated May 11, 2023 at 6:42 p.m. UTC

Bitcoin (BTC) slipped to under $20,000 during Asian trading hours on Wednesday as a brief relief rally seemed to reverse amid recession fears in the broader equity markets.

Prices dropped to just over $19,900 at press time, a 4% drop in the past 24 hours and a 7% slide over the past week. The decline came as analysts at Morgan Stanley and Goldman Sachs warned on Tuesday that “recession risks were “not fully priced in."

“The bear market will not be over until recession arrives or the risk of one is extinguished,” Morgan Stanley said in a note. Meanwhile, Goldman analysts said stock traders were pricing in a mild recession, “leaving them exposed to a further deterioration in expectations.”

Bitcoin reversed gains from a relief rally seen since the start of this week. (TradingView)
Bitcoin reversed gains from a relief rally seen since the start of this week. (TradingView)

Separately, Citibank pegged the probability of the global economy seeing a recession in the near future at nearly 50% as central banks “tighten monetary policy and demand for goods weakens.”

Supply shocks for basic necessities could push up prices and eventually cause an economic slowdown, Citi economists said. The team now sees the world economy growing 3% this year and 2.8% in 2023, according to Bloomberg.

Since Wednesday’s open, Hong Kong’s Hang Seng index has fallen 2.29%, Shanghai Composite has dropped 1.20%, and India’s Sensex has slid 1.29%. In Europe, Germany’s DAX plunged 2.9%, while the stock index Stoxx 600 dropped 1.56%.

Premarket futures on U.S. equities fell during European morning hours. Futures on the technology-heavy Nasdaq 100 dropped 1.70%, while S&P 500 futures lost 1.56%. Crude oil (West Texas Intermediate) futures fell 5%.

Bitcoin has tracked broader markets closely over the past few months, meaning a further slide in the broader markets could see bitcoin falling further over the coming weeks as traditional banks sound alarms on the state of the overall global economy.

Crypto market observers say a long-term recovery in bitcoin prices would take place only when global sentiment turns position and with signs of expansion.

“It’s foolish to forgo the wider macro context in which crypto and finance operate,” Andrey Diyakonov, chief commercial officer at Choise, said in a Telegram message earlier this week.

“Commodities market indicators and [European Union] bonds market meltdown spell out worrying predictions for the world economy," he said.

Diyakono also said recent troubles seen at the crypto lender Celsius Network and crypto hedge fund Three Arrows Capital have added to "crypto industry uncertainty,” and that the market hasn’t “hit the bottom yet.”


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Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.