The global economy is weakening and this is a bad development for Bitcoin (BTC) price. From an economic perspective, this week’s focus will be on important data from the industrial and service sectors. Germany and France are seen as weak brothers in the eurozone, and the rest of the world also seems to be going in the wrong direction.
What Does the Data Say and What Does It Mean for Bitcoin Price?
The world economy is in decline
If we look at the so-called global PMIs – the health indicators for global industry and services – we see a worrying picture. Globally, the industry has not been doing well for some time, but the service sector has been able to stay afloat.
Now we can see from the chart below that the services sector is also slipping and we can cautiously use the word recession again.
While French industry surprised on the upside and German industry seems to have bottomed out, we see the services sector being hurt. In France it was 46.7 and in Germany 47.3 (while 51.5 was expected).
In the chart above we see fewer and fewer countries moving to the lower left corner; That means the services PMI (healthcare services sector) is down. Slowly but surely, Bitcoin and the global economy are feeling the pain of central bank rate hikes.
What does this mean for the Bitcoin price?
Basically, this means that the global economy is one step closer to recession, and that is NOT good for Bitcoin. A recession means people lose their jobs and have to sell investments to stay afloat.
A recession simply means there isn’t enough money to pay the bills, and then, of course, investments like bitcoin are nominated to be the first to sell.
In this respect, it remains to be hoped that the global economy will be able to reverse this development, although things are looking less and less rosy for the time being.
Basically, we also see this in the bitcoin price, which has been struggling to regain its uptrend for a while and moved lower last week.