Expert Warns of Risk of Brutal Recession in Crypto Market by 2024
Key Points:
– Macroeconomist Henrik Zeberg warns of a severe recession in the US within the next two years based on historical data.
– Rising inflation and potential blow-off tops in stock and crypto markets are further causes for concern.
– Experts predict a recession could hit in the latter half of 2024, with the possibility of a significant market correction.
In a dire prediction, macroeconomist Henrik Zeberg has raised alarms about a looming severe recession in the United States. Drawing from historical data and market indicators, Zeberg foresees a downturn that could rival the Great Depression of 1929 in its severity.
Historical Patterns Point to Trouble Ahead
Zeberg recently shared a crucial chart from Piper Sandler’s Recession Indicator on the X platform. This chart, which compares two-year Treasury yields with the Federal Funds Rate, has historically shown that shifts in market yields often precede actions by the Federal Reserve and signal economic declines. With inflation currently sitting at 3.4%, reminiscent of previous economic crises, concerns are mounting.
Bearish Signals from the RSI
The chart also highlights the Relative Strength Index (RSI), a measure of momentum in price movements. Past significant bearish patterns in the RSI have often heralded major market crashes. The present ‘Mega Bearish Structure’ indicates a potential impending decline, sparking serious worries about the future economic landscape.
Speculation about a potential recession has intensified as various economic indicators flash warning signs. Decreasing Treasury yields typically drive investor demand for safe-haven assets during times of economic uncertainty, reflecting growing unease about an imminent market slump.
Blow-Off Top: A Risky Surge
There are talks of a potential blow-off top in US equities and cryptocurrencies, signaling an unsustainable surge in asset prices before a sharp drop. This scenario involves rapid price increases fueled by speculative buying, often resulting in significant market corrections.
A Nervous Market
Game of Trades, an investment research platform, has pointed to the predictive power of the 10-year/3-month US Treasury curve, forecasting a possible recession in the latter part of 2024. With large-cap companies leading the recent market upswing and the cryptocurrency market stabilizing, concerns about the timing and impact of a looming recession are growing.
In Conclusion:
The warning signs are clear, but do you think the experts are exaggerating, or is there a storm on the horizon? Share your thoughts.