The current economic environment supports continued market expansion rather than contraction.

Source: Cryptoslate

Translation: Blockchain Knight

Julien Bittel, Head of Macro Research at Global Macro Investor, stated that based on comprehensive economic indicators, the current cryptocurrency bull market is still in its early stages.

In an analysis shared on the X platform on September 8, Bittel refuted the prevalent "cycle peak" sentiment in the cryptocurrency market and challenged the notion of "late cycle" by analyzing traditional economic indicators.

Typical late-cycle economies usually exhibit the following characteristics: manufacturing sentiment is extremely high (ISM index around 60), service sector sentiment remains elevated, homebuilder confidence is strong, consumer and labor confidence is ample, investor sentiment is bullish, and wage growth is accelerating.

However, Bittel pointed out that current data presents a starkly different picture. After incorporating indicators from ISM (Institute for Supply Management), NAHB (National Association of Home Builders), NFIB (National Federation of Independent Business), BLS (Bureau of Labor Statistics), AAII (American Association of Individual Investors), and The Conference Board into a comprehensive sentiment measurement system, he found that U.S. economic sentiment remains "very mild," far from the extreme optimism levels typical of late cycles.

He stated, "The current economy does not exhibit late-cycle characteristics above trend levels; it resembles an early-cycle economy that is trying to build momentum."

Central bank policies provide additional support for this view. Nearly 90% of central banks globally are implementing interest rate cuts, which Bittel claims creates a "non-conventional" environment and provides "strong momentum for the business cycle" in the long term.

The trend in oil prices further confirms the "early cycle" judgment: current oil prices are nearly 20% below trend levels and continue to decline. This indicates that the current financial environment is in a loose state, rather than the tightening state typically seen in late cycles.

Historically, since the early 1970s, when oil prices are 50% above trend levels, it often signals the onset of economic recession.

Temporary Help Services data shows "early cycle characteristics": the industry is gradually recovering from extremely low levels, indicating that the economy is in a recovery phase rather than a downturn phase.

Bittel noted that late cycles typically manifest as "year-on-year growth slowing from positive," reflecting an overheating economy losing momentum.

He attributed the rising unemployment rate to the lagging nature of employment data, referring to it as "the past six months in the rearview mirror."

Before companies decide to hire "high-cost full-time employees with benefits and pensions," they typically first increase employee overtime hours and hire temporary workers.

Bittel also defined the current economic environment as "transitioning from early cycle to mid-cycle," describing this process as moving from "macro spring" (rising growth, declining inflation) to "macro summer" (rising growth, rising inflation).

He concluded that this macro perspective challenges the prevailing sentiment in the current cryptocurrency market, which believes the bull market cycle has peaked. On the contrary, the current economic environment supports continued market expansion rather than contraction.

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