The International Monetary Fund (IMF) has published a stark prediction that the unprecedented global economic slowdown triggered by 'the great lockdown' will get much worse before information technology gets better.

With Bitcoin (BTC) experiencing a tape correlation with the traditional markets, the cryptocurrency needs to pause away from the S&P 500 if it has any chance of producing the highly anticipated post-halving bull run.

International monetary fund drops global growth estimate past half-dozen.3%

On Apr 14, the IMF published its quarterly Earth Economical Outlook report, describing the COVID-19 induced lockdown every bit the worst economic downturn in ninety years and predicting a total of nine trillion dollars of losses by 2022.

The report'south growth estimate has fallen by 6.iii% since Jan, predicting a year-over-year recession of 3% as economic action retraces in more than 170 nations.

Imf Director of the Research Gita Gopinath said the prediction was based on the assumption "the pandemic and required containment peaks in the 2nd quarter for most countries in the world, and recedes in the second half of this year" and said the growth forecast was a "major revision over a very short menses":

"This makes the Not bad Lockdown the worst recession since the Great Depression, and far worse than the Global Financial Crisis."

The 2008 financial crisis saw a 0.ane% global retraction in growth 12 months from its outset. However this current crisis has an immediate touch on China and Bharat. The IMF is more optimistic about 2022, predicting a five.6% global recovery.

Impacts of 'Great Lockdown 2022' and 2008 Global Financial Crisis on Regional Economies. Source: International monetary fund

International monetary fund predictions are bad news for Bitcoin

The International Budgetary Fund's outlook for the global economy may comprise a negative omen for the Bitcoin and cryptocurrency markets, with BTC recently producing record correlation to the S&P 500. While information technology's unknown how traditional markets volition react if the crisis deepens, the history of major fiscal crises advise they have further to fall.

According to data published on April 14 by Coinmetrics, the mid-March market place turmoil saw Bitcoin in record correlations with the traditional markets. While confluence appeared to briefly normalize towards the end of March, early April has seen correlations rebound and reapproach final month'southward tape levels.

Correlation between golden and BTC at all-time high

However, the immediate liquidity crisis appears to have driven confluence across virtually asset classes — with correlation between the Southward&P 500 and golden reaching its highest in half a decade, while confluence betwixt Bitcoin and gilt sets a new record.

Correlation between Bitcoin and gold. Source: CoinMetrics

Gold's operation during the GFC could prove instructive. While the initial liquidity crunch drove a 30% drop in the price of gold during the first six months of the 2008 crisis, gold recovered to gain 150% over the adjacent three-and-a-half years.

Should history echo itself, Bitcoin will have to shake its confluence with the traditional markets and motility in-step with gold to produce the anticipated post-halving balderdash trend.

Coinmetrics said that over the long term, the correlation between Bitcoin and the stock market was expected to disappear:

"Although correlations recently reached best highs, information technology is unlikely that Bitcoin and Southward&P 500 correlations will remain elevated in the long-term without major changes in the fundamentals of one or both markets."