Markets
Zeberg predicts major slowdown and fallout in crypto market
Macroeconomist Henrik Zeberg has issued a stark warning that the United States could face a severe recession over the next two years. Using historical data and market indicators, Zeberg predicts that this downturn could be the worst since the Great Depression of 1929.
Terrifying, right? Here’s all the information you need to know.
Historical Patterns Indicate Problems
In a recent article on Platform X, Zeberg highlighted a key chart from Piper Sandler’s Recession Indicator. This chart compares two-year Treasury yields with the federal funds rate, showing patterns in which changes in market yields often preceded Federal Reserve actions and signaled economic decline. Currently, inflation is 3.4%, a level reminiscent of past economic troubles.
RSI Bearish Signals
The chart also emphasizes the relative strength index (RSI), which measures the momentum of price movements. Historically, significant downtrends in the RSI portend major market crashes. The current “mega bearish structure” suggests a similar impending decline, raising serious concerns about future economic stability.
Speculation about a potential recession has intensified as various economic indicators raise warning signals. Falling Treasury yields typically increase investor demand for safe-haven assets amid economic uncertainty, reflecting growing concerns about an impending market downturn.
Blow-Off Top: a dangerous push
There is speculation about a possible boom in US stocks and cryptocurrencies, indicating an unsustainable rise in asset prices before a sharp decline. This scenario typically involves rapid price increases driven by speculative buying, often leading to large market corrections.
A worried market
Investment research platform Game of Trades has highlighted the predictive ability of the 10-year/3-month US Treasury curve, forecasting a likely recession in the second half of 2024. As large-cap companies lead the recent market rally and the cryptocurrency market consolidates, concerns about the timing and impact of a potential recession continue to grow.
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Do you think the experts are overreacting or that a storm is brewing? Let us know what you think.