A top economist is predicting a wild ride for the markets, with Bitcoin soaring to new heights before a devastating recession hits.
Bitcoin’s Blow-Off Top
Henrik Zeberg, the head economist at Swissblock, believes a major market rally is coming, including a Bitcoin price surge to between $115,000 and $120,000. This spike, known as a “blow-off top,” is characterized by a rapid price increase followed by a sharp decline. Zeberg sees this as a result of the Federal Reserve injecting massive amounts of liquidity into the market to prevent a recession.
He predicts that the S&P 500 will reach 6,100-6,300, the Nasdaq will hit 24,000-25,000, and the Dow Jones Industrial Average will climb to around 45,000.
The Recession is Coming
While Zeberg is bullish on the short-term market outlook, he warns that a severe recession is on the horizon, potentially the worst since 1929. He expects the recession to hit in two phases: a deflationary phase followed by a stagflationary phase, with a brief bounce in the middle.
Fed Rate Cuts Won’t Save Us
Zeberg is skeptical that the Federal Reserve’s planned rate cuts will be enough to prevent the recession. He points to historical data that suggests these measures are ineffective in the face of deeper economic problems. He also highlights the recent end of the yield curve inversion, which is traditionally seen as a recession indicator.
Job Market Weakness
Adding to his concerns, Zeberg cites the recent downward revision of US employment data, indicating a weaker job market than initially thought.
Bitcoin’s Future
While Bitcoin is expected to reach new highs in the short term, Zeberg’s prediction of a major recession suggests a challenging future for the cryptocurrency.
Overall, Zeberg’s outlook paints a picture of a volatile market, with a potential for a significant short-term rally followed by a severe recession. It remains to be seen whether his predictions will come true, but his analysis offers a sobering perspective on the current economic landscape.
