The International Monetary Fund (IMF) has released a clear forecast that before it gets better. The ongoing global economic recession caused by ‘the big lockdown’ will get even worse.

As for Bitcoin (BTC) witnessing a record correlation with the traditional markets. If it has any chance of delivering the highly awaited post-halving bull run, the crypto-currency must break away from the S&P 500.

The forecast of global growth fall by 6.3 percent

The IMF released its quarterly World Economic Outlook report on April 14. Identifying the COVID-19 triggered lockdown as the worst economic downturn in 90 years. And predicting a cumulative loss of nine trillion dollars by 2022.

After January, the growth rate has dropped by 6.3 percent, forecasting a year-over-year 3 percent downturn as economic activity in more than 170 nations retraces.

IMF Research Director Gita Gopinath said the forecast was based on the assumption that “the pandemic and required containment peaks in the second quarter for most countries in the world, and retreat in the second half of this year”. And claimed that the growth forecast was a “major revision over a very short period”:

“This makes the Great Lockdown the worst down turn since the Great Depression, and far worse than the Global Financial Crisis.”

From its outset, the financial crisis of 2008 saw a global retraction of 0.1 percent in growth for 12 months. The ongoing situation will have an immediate effect on China and India, however. Around 2021, the IMF is more positive forecasting a global recovery of 5.6 percent.

IMF forecasts are bad news for Bitcoin

The outlook for the global economy from the International Monetary Fund may provide a negative indicator for the Bitcoin and Cryptocurrency markets, with BTC recently generating record correlation to the S&P 500. Although it is unclear how mainstream markets will respond as the recession deepens. The history of global financial crises suggests that they will have to fall much further.

The mid-March market volatility saw Bitcoin in unprecedented correlations with the mainstream markets. According to data released by Coinmetrics on April 14. Although the confluence appeared to normalize briefly towards the end of March, correlations rebounded in early April. And the record rates of last month re-approached.

Gold and BTC correlation at an all-time high

However, the recent liquidity crisis seems to have led to a confluence in most asset classes — with the correlation between the S&P 500 and the gold hitting its height in half a decade, while the confluence between Bitcoin and gold sets a new high.

Gold’s performance may prove instructive during the GFC. Although the initial liquidity crisis lowered the gold price by 30 percent within the first six months of the 2008 recession, gold recovered to rise 150 percent over the next three and a half years.

If history repeats itself, it will be important for Bitcoin to shake its confluence with mainstream markets. And move in step with gold to deliver the anticipated post-halving bull trend.

Coinmetrics said the link between Bitcoin and the stock market had been predicted to vanish in the long term: