Singapore’s state-owned investor Temasek said it sees more broader-market declines in the coming months.
In the midst of a sell-off in broader markets that saw equity indexes decline and the euro approach parity with the U.S. dollar, Bitcoin fell through a key support level Tuesday, dropping below $19,700.
According to price charts, bitcoin was rejected at a price of $21,800 last week. Over the weekend, it found some support at $20,500 before falling to the $19,700 level in the early Asian hours of today. In the European morning, there was a brief increase to almost $20,000 and then a drop to the lower level.
According to technical analysis, bitcoin could fall as low as $18,700, which is the price it reached earlier this month. On the other hand, if prices rise from current levels, bitcoin could soon reach a high of $21,300.
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.”