Alpha Feed

Tides Are Turning

The US ISM is one of the best indicators for forecasting asset price trends, and it looks like its getting closer to the bottom of its two-year downtrend.

Markets are forward-looking, and heading into this year equities were already pricing in a pretty significant slowdown – if not a full-blown recession.

What’s crazy is how closely the ISM has tracked the trajectory of prior cycles, including the timing of its peaks and troughs. Every 3.5 years, it’s rinse and repeat, like clockwork.

Why does this matter? Because BTC usually shows signs of a reversal near ISM bottoms too – and so far, that’s exactly what we’re seeing.

We dive into all this plus a breakdown of Coinbase’s ($COIN) latest rally in this week’s Bull vs. Bear.

Very interesting! any insight into the median/average time for the market to sync up with ISM? eyeballing it, looks like 6-12mo or so.

It ranges a bit but BTC's price typically bottoms 5-6 months ahead of the ISM (March 2020 was an exception given how violent the drop in both markets and the ISM was at the same time)

This is great KK. How does the recent DXY weakness factor into this? Is its poor performance pricing in suspected rate cuts to combat recession?

Yes DXY weakness does factor into this. We saw a pretty sizable move lower after this week's CPI print, which caused it to break below the neckline of an extended head and shoulders pattern that's been developing. That would imply further DXY weakness ahead but need to see how it trades over the next week to confirm whether this breakdown has legs to it