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Julien Bittel, head of macro research at Global Macro Investor, saidBased on comprehensive economic indicators, the current cryptocurrency bull market is still in its early stages.
In an analysis shared by X platform on September 8, Bittel refuted the widespread “cycle peak” sentiment in the cryptocurrency market and challenged the “late-period” statement by analyzing traditional economic indicators.
A typical late-cycle economy usually has the following characteristics: extremely high sentiment in manufacturing (ISM index is around 60), high sentiment in service industry, strong confidence in home builders, sufficient confidence in consumers and workers, bullish investor sentiment, and accelerated wage growth.
But Bittel points out that the current data presents a completely different picture.After he included indicators of ISM (American Supply Management Association), NAHB (American Housing Builders Association), NFIB (American Independent Enterprise Alliance), BLS (American Bureau of Labor Statistics), AAII (American Individual Investors Association) and The Conference Board (American Federation of Large Enterprises) into the comprehensive sentiment measurement system, he found that the US economic sentiment was still “very mild” and far from reaching the extremely optimistic level in the late period of the cycle.
“The current economy is not a late-period characteristic above the trend level, but more like an early-period economy that is trying to accumulate momentum,” he said.
Central Bank policy provides additional support for this view.Nearly 90% of the world’s central banks are implementing rate cuts, which Bittel says has created an “unconventional” environment and provides a “strong impetus for the business cycle” in the long run.
The trend of oil prices further confirms the judgment of the “early period of the cycle”: the current oil prices are nearly 20% lower than the trend level and are still falling.This means that the current financial environment is in a loose state, rather than the tightening state that usually occurs later in the cycle.
According to historical data, when oil prices have risen by 50% higher than the trend since the early 1970s, it often heralds the arrival of a recession.
Temporary Help Services data show “early cycle characteristics”:The industry’s growth has gradually rebounded from extremely low levels, which shows that the economy is in a recovery phase, not a decline phase.
Bittel pointed out that the later period of the cycle is usually manifested as “year-on-year growth to slow down”, reflecting that the overheated economy is losing momentum.
He attributed the rise in unemployment to the lag in employment data, calling it “the past six months in the rearview mirror.”
Before a company decides to recruit “high-cost full-time employees with benefits and pensions”, it usually increases the overtime hours of employees and hires temporary employees.
Bittel also defines the current economic environment as “transition from the early stage of the cycle to the mid-term of the cycle”, and describes this process as moving from “macro spring” (growth, inflation decline) to “macro summer” (growth, inflation rise).
He concluded that this macro perspective challenges the current mainstream sentiment in the cryptocurrency market, which believes that the bull market cycle has reached its peak.on the contrary,The current economic environment supports the continuous expansion of the market rather than contraction.
