Bitcoin plunged below $20,000 on Wednesday as a plethora of factors such as macroeconomic difficulties and cryptocurrency companies' struggles continue to drag down the market.

The world’s largest cryptocurrency by market value was trading down more than 4% at around $20,056.48 at 07:36 a.m. ET, according to CoinDesk data. Earlier on Wednesday, bitcoin fell as low as $19,841.

Other digital coins including ether were also dramatically lower.

Bitcoin has been trading within a tight range in the last two weeks unable to make a major move much above $22,000.

“A narrative that could well play out for the rest of the year and beyond is guiding bitcoin lower today, one of looming recession and mushrooming levels of inflation,” analysts at cryptocurrency exchange Bitfinex said in a note on Wednesday.

The surging inflation and central banks’ predictions of further rate hikes, sparked fears of a recession in the U.S. and other parts of the world.

On Tuesday, U.S. stock markets fell and futures remained under pressure on Wednesday. In recent months, Bitcoin has become closely correlated to U.S. stock markets and tend to follow when they increase or plunge.

Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC that bitcoin is likely going to trade between $17,000 and $22,000 “for a while, given the current market sentiment” and another expected interest rate hike from the U.S. Federal Reserve in July that continues to “weigh down all risk assets.”

“Most bounces are being sold off for the past few weeks, typically categorized as bear market bounces, aiming to trap late buyers, only to have them sell off positions lower,” Ayyar said.