Wed. Jun 19th, 2024
Zeberg Anticipates Significant Downturn and Cryptocurrency Market Consequences

Macroeconomist Henrik Zeberg has raised concerns about a possible severe recession in the US in the next two years, using historical data and market indicators to make his case. Zeberg’s analysis suggests that the upcoming downturn could be the most severe since the Great Depression of 1929.

In recent months, there has been increased speculation about a potential recession as various economic indicators turn negative. Declining treasury yields typically lead to increased investor demand for safe-haven assets during times of economic uncertainty, indicating growing worries about a possible market downturn.

One such indicator is the Piper Sandler Recession Indicator chart, which compares two-year Treasury yields with the Federal Funds Rate. This chart shows that shifts in market yields have historically preceded actions by the Federal Reserve, often indicating economic downturns. In addition, current inflation levels at 3.4% mirror troubling levels seen in the past.

Another important factor to consider is the Relative Strength Index (RSI), which measures momentum in price movements. Large bearish structures in the RSI have historically preceded major market crashes, and the current ‘Mega Bearish Structure’ suggests a looming decline, raising concerns about economic stability.

Investment research platform Game of Trades has pointed to another predictive ability of an important indicator – 10-year/3-month US Treasury curve – suggesting that a recession is likely to hit in the latter half of 2024. With large-cap companies leading the recent market rally and cryptocurrency market consolidating, concerns about timing and impact continue to grow as this scenario unfolds.

There are also fears of blow-off top in US equities and cryptocurrencies which signaling unsustainable surge in asset prices before sudden decline which often involves rapid price increases driven by speculative buying resulting significant market corrections.

Overall, these factors suggest that while there is still time for action to prevent or mitigate a potential recession, it is important for investors and policymakers alike to take heed of these warning signs and take appropriate measures to safeguard their investments and stabilize financial markets.

By Aiden Nguyen

As a content writer at newscholarly.com, I delve into the realms of storytelling with the power of words. With a knack for research and a passion for crafting compelling narratives, I strive to bring forth engaging and informative articles for our readers. From decoding complex concepts to unraveling current events, I aim to captivate and educate through the art of writing. Join me on this journey as we explore the ever-evolving landscape of news and knowledge together.

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