Bitcoin Drops Below $20,000 Amid Recession Fears

Bitcoin dropped below $20,000 Saturday—trading at its lowest levels in over a month—after stocks sold off sharply Friday as investors pulled back from risky assets amid renewed concerns the Federal Reserve’s efforts to fight inflation could tip the economy into recession.

Bitcoin fell to a low of $19,886 Saturday before recovering slightly, trading at $20,055 as of the late afternoon, down 2.93% over the past 24 hours and off 70.1% from a record high of $67,037 in November.

The Dow Jones Industrial Average plummeted more than 1,000 points to 32,283 on Friday after Federal Reserve Chair Jerome Powell warned that soaring inflation will “take some time” to ease and will require the Fed to act “forcefully.”Other cryptocurrencies fell Saturday, with Dogecoin dropping 3.53% to 6 cents, while Ether sank 4.99%, to $1,481.

Shares of leading crypto broker Coinbase, meanwhile, fell 6.49% Friday to close at $66.74, down sharply from $368.90 in November, amid lower crypto trading volumes in a slumping market.

Low interest rates and government stimulus during the Covid-19 pandemic fueled skyrocketing cryptocurrency prices, but they’ve fallen substantially in recent months. Economists are divided on the possibility of recession. On Friday, economists at Goldman Sachs said the odds of entering a recession over the next year are roughly one in three, while economists at Nomura said they believe one will start this year and Bank of America warned a “mild recession” is possible by the end of the year.

So far, the Federal Reserve has made two interest rate hikes in its effort to curb inflation, raising its key lending rate 75 basis points in May and again in July, after inflation hit a 40-year high.

More than 50% of daily bitcoin trading is likely fake or non-economic, Forbes determined in an analysis published Friday, underlining concerns about the transparency and solidity of crypto markets. In the analysis of 157 crypto exchanges worldwide, Forbes found daily bitcoin volume on June 14 was $128 billion, 51% lower than the $262 billion from the total self-reported volume from multiple sources.

I am a Boston-based reporter, foodie and cyclist. Before joining Forbes, I covered the environment, local government and the arts for a small-town newspaper on

Source: Bitcoin Drops Below $20,000 Amid Recession Fears

Critics by Shaurya Malwa and CoinDesk

Price-charts show Bitcoin saw rejection at last week’s $21,800 level. It experienced some support at $20,500 over the weekend and dropped to the $19,700 mark in early Asian hours today. A brief bump up to almost $20,000 was followed a return to the lower level in the European morning.

The declines came as Singapore state-owned Temasek Holdings, which manages more than $287 billion of assets, cautioned of more downturns across financial markets, citing the likelihood of a “recession in developed markets.”

Temasek said it forecast a “mild recession” in the U.S. next year, adding that China faces “challenges” and the global economy “is in a fragile state.” “Rising inflation, surging commodity prices, and severe supply chain bottlenecks have uncovered further fault lines in the global marketplace,” it said in a statement.

The euro dropped to a 20-year low of $1.0002 against the dollar, approaching parity. The weakness arose amid concerns of an energy crisis stemming from Russia’s invasion of Ukraine that would tip the region into a recession, while the dollar was buoyed by expectations of the Federal Reserve committing to faster rate hikes.

Equity markets also suffered. In Asia, the Hang Seng index fell 1.26% while Japan’s Nikkei 225 dropped 1.75%. The Stoxx Europe 600 index fell 0.60%, while Germany’s DAX lost 1%. U.S. futures on the Nasdaq 100 and S&P 500 fell 0.68%.

Some Bitcoin investors see more reasons for a decline than a rebound.

“An additional reason has strengthened our view that the upside will be capped in the near-term: This is the news about Mt. Gox releasing approximately 140,000 BTC in August,” QCP Capital traders said in a Telegram broadcast on Tuesday.

“Our main takeaway is that there is a high chance of BTC supply flooding the market soon,” they wrote. “The possible impact would be additional selling pressure on BTC and perhaps the outperformance of ETH and Alts against BTC.”

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