The spread of notorious coronavirus is undermining sales of some products, unsettling supply chains, throwing travel into chaos, scaring off the stock markets, and intensifying fears of global recession. The recession had been anticipated for years and according to the crypto-focused market research company, Crebaco its occurrence should not be as a surprise.

In a document shared with Cointelegraph Crebaco, it is written that many market analysts predicted the recession that has taken hold of the markets over the last several years. The states thatsince the last few days Global markets have been correcting. “Some blame it on CoronaVirus, some curse on crude oil.”

According to the report points, in 36 hours BTC corrected by over 50%, whereas the DAX, S&P500, Nasdaq, CAC, Nikkei, and HK Stock Exchange, and a small number of other global stock markets simultaneously collapsed by about 20% on the average. Additionally, oil-related equity markets have also seen a recession due to the price war on crude oil between Russia and Saudi Arabia.

Yield curve analysis had anticipated a recession

The U.S. economy is the best indicator as to whether a downturn is taking place or not, said Crebaco researchers. The report contains the U.S. annual yield curve, which consists of the short-term and long-term interest rates given by the treasury, which is an amazingly accurate tool for knowing and predicting US economic conditions, and recession. The report reads: However, “[A] flattening yield curve is not looked at with positivity. But when short term interest rates become higher than long term interest rates, it is generally an indication that the economy is in recession.”

Crebaco scholars call attention to the fact that the short-term interest rates are presently about 0.5% for 10 years and 1% for 30 years, as a standard. The company also suggests that a downturn was due as the historical charts suggest that one correction of the international financial markets happens every 10 years, generally.

Isn’t Bitcoin a safe-haven anymore?

Bitcoin is often named digital gold by numerous fans, who suggest that it is a virtual substitute to the most common safe-haven asset. Yet, the report draws attention to the fact that when BTC dropped by 50% in 36 hours all were shocked.

The investigators suggest that the cause why the token reacted so fiercely to the market downturn was that the BTC and crypto market size was then lower than $265 billion, while universal economies comprised trillions of dollars. The report states that it is too small to handle, as it is the first downturn of Bitcoin. Organizations were not concerned with trading and providing liquidity to the cryptocurrency market due to the market size. The market plunged due to the blowout in trade rates at several exchanges that trade virtual commodities like Bitcoin.”

Namely, Crebaco researchers suggest that the market fell dramatically as there was a tiny order book in major exchanges, and they haven’t had liquidity providers to back up the unexpected crash. Investigators highlight that king among haven assets – gold in two days has corrected by approximately 8.5% that is an immense indicator for a 3000-year-old reputable product.

Yet, several people predict that BTC could endure hardships recovering following this correction. Infamous BTC bull and CEO of Galaxy Digital Mike Novogratz lately put forward the idea that financiers have lost confidence in the coin. He stated:

“Bitcoin has always been a confidence game as all cryptocurrency is. And it seems global confidence in just about anything has vanished.”

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