Bitcoin (BTC-USD) Is Expected to See a Marginal Fall of 1.9% in the Week

Bitcoin (BTC-USD) is expected to see a marginal fall of 1.9% in the week, after U.S. recession fears stoked a global selloff on Monday.

Bitcoin (BTC-USD) is poised to log a weekly decline of 1.9%, following U.S. recession fears that triggered a global selloff on Monday.

The world's largest cryptocurrency crashed below the $50K mark at the start of the week, after a disappointing U.S. jobs report last week stoked fears that the U.S. economy is headed toward a recession. The concerns sparked a selloff in global markets on the day.

"Bitcoin's (BTC-USD) initial reaction as a ‘risk off’ asset is not surprising," Bernstein analyst Gautam Chhugani said.

Bitcoin failed as a flight to safety asset during recent market turmoil, crashing from $62,000 to $52,000 while other assets saw less significant declines, SA analyst Stony Chambers Asset Research said.

“When panic about the unwind of the Yen carry trade started to spread, people looked for liquidity and found Bitcoin standing there as an asset tradable 24/7/365, and able to absorb massive sell pressure," said Cory Klippsten, CEO of Swan Bitcoin, a Bitcoin financial services firm.

The carry trade strategy involves borrowing currencies with low interest rates to invest in higher-yielding assets elsewhere. Investors rapidly unwound Yen carry trades over the past week as the currency strengthened after the Bank of Japan's larger-than-expected rate hike.

"The yen carry trade and ongoing economic risks could continue to pressure asset prices, making caution prudent," SA analyst Richard Durant said.

BTC, however, bounced back on Tuesday, as it regained some lost ground, and stayed above the $50K mark.

The cryptocurrency, notably, saw a rebound in its prices on Thursday, after the U.S. weekly initial jobless claims dropped more than expected, and provided some comfort to investors.

The price has bounced back from 48k to almost 60k over the course of the week as people buy the dip and reallocate back into this incredibly useful asset, Klippsten added.

Bitcoin's recent drop was likely due to the forced unwinding of leveraged positions, making a short-term rebound likely, Durant added.

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