Bitcoin Mirrors Summer of 2024: What Next?

Bitcoin has fallen -20% in value since its peak, highlighting the recession risk and macro-uncertainty that are currently dominating market discussion. Tomas On Markets, an analyst at the macro level (@TomasOnMarkets), believes that the economic situation is not as dire and bleak as headlines would suggest.

“Doesn’t look very recessionary to me?” Tomas wrote a piece in the recent issue of The New York Times. post He reiterated his skepticism, which he had been expressing for several months. He pointed out specific indicators which began to slide in February, but are now stabilizing. According to his analysis, US growth nowcasts—which aggregate various real-time measures of economic growth—”fell throughout February but have been leveling off for three weeks.” He also referred to the Citi Economic Surprise Index, which measures how economic data actually compares with consensus estimates. The CESI has been on a downward trend since January. This indicates that the data released was below what had been expected. However, it’s also stabilised in recent weeks.

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“Falling CESI = data coming in below expectations, rising CESI = data coming in above expectations,” Tomas emphasized the importance of this index to the sentiment on the markets. This means that while the markets became more defensive in the first quarter of the year, they are not deteriorating as fast as at the beginning of 2025.

Why Bitcoin Mirrors summer 2024

Tomas drew parallels with two previous episodes that were notable: the turmoil of summer 2024 and late 2018’s rout. In each instance, he said, global stock markets experienced a rapid decline, triggered in part by the “global financial crisis”. “growth/recession scares,” Combined with exogenous forces.

“For me, the two recent instances that are the most similar to today in terms of both price action and macro backdrop are Summer 2024 and late 2018,” He wrote. In Summer 2024, growing concerns about growth and a widespread unwinding of the yen carried trade contributed to an equity market decline by 10%. An escalating battle between the United States and China during the first Trump-era tariff moves Similar factors prompted a 10% correction to the equities market, which eventually grew into an additional 15% decline.

Tomas notes that equity markets have also experienced a recent decline of approximately 10%, from their peak to the bottom, and he sees a distinct echo in those historic events. He noted that such parallels extend to Bitcoin, which fell around 30% in Summer 2024 and 54% in late 2018—close to the 30% slide it has endured this time around. He asked which direction the market will take: Will it follow the Summer 2024 corrective wave, or spiral into an extended period of painful losses, similar to the late-2018 selloffs?

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“So which way?” Tomas questioned, underlining the uncertainty that both crypto assets as well as equities face. Tomas’ position is more in line with a summer 2024 scenario than the turmoil of 2018. He said, “I’m still in the camp that tariffs won’t be as bad as many expect — I’ve been here for months,” A viewpoint that he thinks also helps to explain the surprising resilience seen in recent risk assets. He said that “some of the noises over the past couple of days are potentially pointing towards this outcome, which is probably why risk assets have jumped today,” Although he did not make any claims about a final resolution.

Tomas believes that there are several factors which support the idea that our current landscape is more aligned with summer 2024 rather than late 2018. The recent loosening of the financial conditions that had been tightened in early 2018, but which have now moderated, is one factor. One is the US dollar’s notable weakening The rise of the dollar in 2018 has led to a dramatic drop, which has increased pressure on assets around the world.

Tomas noted that many leading indicators are still in favor of a business expansion. This is, according to him, less indicative than the contractionary signals which alarmed investors seven years ago. He also noted that the seasonality of US equity indexes is generally positive, with many rebounds after weak Februaries and a return to firmer ground by March. Finally, tight credit spreads—still below their highs seen in August 2024—point to stable credit markets that do not appear to be pricing in severe economic distress.

Tomas admitted that he was tired of the constant discussion about economic policy stimulants. “I’m honestly really bored with all the tariff talk,” “April 2 is still crucial to clarity,” he said, reminding his followers.April 2nd ‘tariff liberation day‘will likely play a major role in the decision,” he concluded.

Bitcoin was trading at $86,557 as of the time this article went to press.

Featured image was created using DALL.E chart by TradingView.com