Zeberg Forecasts Crypto Market Fallout due to Major Downturn

Macroeconomist Henrik Zeberg has warned of a possible severe recession in the US in the next two years, with implications potentially as dire as the Great Depression of 1929. Zeberg’s analysis, based on historical data and market indicators, highlights worrying signs that indicate an economic downturn on the horizon.

One of the main warning signs Zeberg pointed out is a Piper Sandler Recession Indicator chart, which compares two-year Treasury yields with the Federal Funds Rate. This chart shows a pattern in which shifts in market yields precede actions by the Federal Reserve, often foreshadowing economic declines. Additionally, high inflation rates at 3.4% echo levels seen in times of economic turmoil in the past.

The Relative Strength Index, a measure of momentum in price movements, is another signal that Zeberg highlighted in the chart. Large bearish structures in the RSI have historically signaled significant market crashes, and the current ‘Mega Bearish Structure’ suggests a similar decline is on the horizon, raising concerns about future economic stability.

Recent months have seen a rise in speculation about a potential recession as various economic indicators start showing red flags. Declining treasury yields often lead investors to seek safe-haven assets in times of economic uncertainty, indicating growing concerns about an upcoming market downturn. There are also concerns about a possible blow-off top in US equities and cryptocurrencies, which could mean a sudden and drastic decline in asset prices following an unsustainable surge driven by speculation.

Game of Trades, an investment research platform, has highlighted the predictive ability of the 10-year/3-month US Treasury curve, suggesting a recession may hit in the latter part of 2024. As large-cap companies lead the recent market rally and the cryptocurrency market consolidates, fears about the timing and impact of a potential recession continue to mount.

In conclusion, while it is too early to predict with certainty whether or not a recession will occur in

By Sophia Gonzalez

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