Henrik Zeberg is the Head Macro-Economist of Swissblock. He has reiterated his belief that an inevitable US recession will occur, but only after a significant upswing on financial markets. This includes a rally in Bitcoin between $115,000 to $120,000. In his latest analysis Zeberg, in a post on X blog, discussed the cyclicality of markets as well as how these align with economic indicators from history and current fiscal policy.
“REMEMBER!? In December 2022, everybody was BEARISH! I was BULLISH! We were told that ‘Imminent Crash’ was ahead of us – despite the fact that the market bottomed in October 2022,” Zeberg repeated in his article. Zeberg outlined his precise predictions of major market indexes, including Bitcoin. He pointed to an imminent “Blow Off Top”.
Bitcoin faces its first ever recession
The following are some of the ways to get in touch with each other “blow-off top” This pattern is characterized by a rapid, sharp increase in price on financial markets followed by a similar sharp drop. It is caused by intense pressure from buyers that pushes prices up to extreme levels, usually due to speculative behavior or an euphoric mood among traders. This price increase is unsustainable and usually leads to traders selling off their stocks to make profits, or because they are overbought.
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Zeberg’s predicted blow-off top could be caused by US Federal Reserve injections massive amounts of liquidity To prevent a possible recession, the government should put money into circulation. Based on this, Zeberg forecast that the S&P 500 will rise to 6,100-6,300, the Nasdaq to 24,000-25,000, the Dow Jones Industrial Average to roughly 45,000, and Bitcoin to $115,000-120,000.
Zeberg’s bullish position contrasts sharply with the dire predictions he made for post-rally. “Now….. we are not at the top – yet! But Recession IS coming – and it will be the worst since 1929. Major Bear market (in 2 phases; Deflationary and Stagflationary – separated by a mid-way bounce as Fed enters in 2025),” He suggested a complicated recessionary cycles influenced both by market dynamics and Federal Reserve policies.
Skepticism of the economists about impending legislation Federal Reserve rate cuts It is grounded in an extensive critique of previous measures. Despite the market’s expectation of a 25 basis points cut at the next FOMC meeting in September—a move supported by 73.5% of market participants (according to the CME FedWatch tool), with a smaller fraction (26.5%) anticipating a more aggressive 50 basis points cut—Zeberg remains unconvinced these will forestall recessionary pressures.
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“But… but… Fed rate cuts…. ?? The Global Economy is breaking. US Recession begins December 2024,” Zeberg expressed his opinion, expressing that he believes short-term injections of liquidity are not sufficient to address deeper economic problems. He cites the same liquidity cycle metrics as those in 2007 and questions the effectiveness of these strategies to prevent the 2008 financial crises.
Zeberg highlights that the recent ending of the inversion US. The yields on 2-year and 10-year Treasury bills are traditionally seen as indicators of an economic recession. Inversions of short-term and long-term rates are usually a sign that investors have uncertainty regarding the economic future.
Zeberg also bases his argument on recent data from the job market. The US Bureau of Labor Statistics revised its March 2024 total employment estimates downward by 818,000—the largest revision in 15 years—indicating significant weakness in the job market, far more pronounced than initial estimates suggested. “Economy much weaker than expected,” Zeberg commented.
Bitcoin was trading at $60.764 as of press time.
Featured Image created using DALL.E and chart from TradingView.com
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Source: www.newsbtc.com
