Zeberg Predicts Major Downturn and Crypto Market Fallout for US Economy

Macroeconomic expert Henrik Zeberg has recently sounded the alarm on a possible deep recession looming in the United States over the next two years. By analyzing historical data and market indicators, Zeberg predicts that the upcoming economic downturn could rival the severity of the Great Depression of 1929.

Market Indicators Point to Trouble Ahead
In a recent analysis shared on the X platform, Zeberg highlighted a Piper Sandler Recession Indicator chart that compares two-year Treasury yields with the Federal Funds Rate. This chart reveals past patterns where changes in market yields foreshadow actions taken by the Federal Reserve, often serving as a warning sign of economic downturns. The current inflation rate of 3.4% is reminiscent of worrisome levels seen in the past.

Bearish Signals in Market Structures
The analysis also focuses on the Relative Strength Index, which measures momentum in price movements. Historically, significant bearish structures in the RSI have preceded major market crashes. The current presence of a ‘Mega Bearish Structure’ indicates a looming decline, heightening concerns about the future economic landscape.

Market Dynamics Under Scrutiny
Recent months have brought increased speculation about a potential recession as various economic indicators flash red. Typically, declining treasury yields drive investors towards safe-haven assets amidst economic uncertainty, indicating a growing unease about an imminent market downturn.

Predictions of a Market Peak
There are talks of a possible blow-off top in US equities and cryptocurrencies, hinting at an unsustainable surge in asset prices before a sharp decline. This scenario involves rapid price hikes fueled by speculative trading, often resulting in significant market corrections.

The investment research platform Game of Trades has underscored the predictive power of the 10-year/3-month US Treasury curve, suggesting that a recession could hit by the latter half of 2024. With large-cap companies spearheading the recent market rally and the cryptocurrency market stabilizing, concerns about the timing and impact of a potential recession are on the rise.

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