Top Economist Predicts Bitcoin Price Top Before Worst Recession Since 1929
August 23 2024 - 9:30AM
NEWSBTC
Henrik Zeberg, Head Macro Economist at Swissblock, has reasserted
his prediction that a US recession is inevitable, but not before a
dramatic upswing in financial markets, including a substantial
rally for Bitcoin to heights between $115,000 and $120,000. In his
most recent analysis posted on X, Zeberg expounded upon the
cyclical nature of markets and how they align with historical
economic indicators and current fiscal policies. “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 reiterated in his post. He
laid out his refined predictions for major market indices and
Bitcoin, pointing to a forthcoming “Blow Off Top”. Bitcoin Faces
Its First Recession Ever A “blow-off top” refers to a sharp, rapid
increase in the price in financial markets, followed by an equally
sharp decline. This pattern is characterized by intense buying
pressure that drives prices to extreme highs, often driven by
speculative or euphoric behavior among traders. This surge in
prices is usually unsustainable, leading to a significant sell-off
as traders take profits or react to overbought conditions. Related
Reading: These Are The Biggest Bitcoin Support & Resistance
Zones, Analyst Reveals The blow of the top predicted by Zeberg
could be triggered by the US Federal Reserve injecting massive
amounts of liquidity into circulation to prevent a recession. 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 stance contrasts starkly with his dire prediction
for the post-rally period. “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
explained, suggesting a complex recessionary cycle influenced by
both market dynamics and Federal Reserve (Fed) policies. The
economist’s skepticism toward the effectiveness of impending
Federal Reserve rate cuts is rooted in a detailed critique of
similar historical 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. Related Reading: September
10: A Bitcoin Game Changer, Says Hedge Fund Founder “But… but… Fed
rate cuts…. ?? The Global Economy is breaking. US Recession begins
December 2024,” Zeberg stated, reflecting his belief that
short-term liquidity injections are insufficient to counteract
deeper economic malaises. He points to the liquidity cycle metrics
comparable to those seen in 2007, questioning the effectiveness of
such strategies in preventing the 2008 financial crisis.
Furthermore, Zeberg highlights the recent end of the inversion
between the US. 2-year and 10-year Treasury yields, traditionally
viewed as a predictor of economic downturns. The inversion, where
short-term yields exceed long-term yields, is typically a signal of
investor uncertainty about the near-term economic outlook. Another
pillar of Zeberg’s argument is the recent job market data. 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. At press time, Bitcoin traded at
$60,764. Featured image created with DALL.E, chart from
TradingView.com
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