The US Economy Shows Signs of Weakness

  Recent findings from a 10x Research report reveal growing concerns about the United States’ economic strength, which could have significan...

 

Recent findings from a 10x Research report reveal growing concerns about the United States’ economic strength, which could have significant repercussions for the crypto market.

According to the report shared with Cointelegraph, Bitcoin's (BTCUSD) value could fall and remain below the critical $50,000 mark, signaling potential trouble for other cryptocurrencies.

A significant downturn in the ISM Manufacturing Index, a traditional economic health barometer, is central to these concerns.

Markus Thielen, founder of 10x Research, explained to Cointelegraph that it "may be premature" for crypto traders to open further leveraged long positions. "The market structure, including fiat-to-crypto on-ramps, has been weak for months. It's unlikely that significant players will invest amid high volatility and unpredictable prices. Many still need to exit positions and deleverage their portfolios," Thielen stated.

Bitcoin and Stock Market Implications

The 10x Research report speculates that the historical correlation between the ISM Index and Bitcoin indicates a bleak forecast for the crypto market. "Historically, Bitcoin has experienced sharp corrections when the ISM peaked."

With the ISM Index indicating economic weakness and the stock market potentially inflated, the report suggests that adjustments are expected imminently. "The S&P 500 might need to align with the 'real' economy, potentially leading to a 20% stock decline."

The US Economy Shows Signs of Weakness

The report underscores the unsteady status of the US economy, emphasizing the shifting stance of the US Federal Reserve. "In the past 48 hours, it has become apparent that the US economy is weaker than the Federal Reserve initially believed," the report notes.

Federal Chair Powell reinforced this point, indicating a potential dovish shift in policy if inflation decreases as anticipated, aiming to cushion further economic downturns.