Nearly 90% of central banks worldwide have cut interest rates, and macro data confirms that the crypto bull market is still in its early stages

The current economic environment is more supportive of continued market expansion rather than contraction.

Source: cryptoslate

Compiled by: 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 a "late-cycle" phase by analyzing traditional economic indicators.

A typical late-cycle economy usually exhibits the following characteristics: extremely high manufacturing sentiment (ISM index around 60), elevated services sentiment, strong homebuilder confidence, robust consumer and labor confidence, bullish investor sentiment, and accelerating wage growth.

However, Bittel pointed out that current data presents a completely 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 typical of late-cycle phases.

He stated: "The current economy does not exhibit above-trend late-cycle characteristics; it is more like an early-cycle economy attempting to build momentum."

Central bank policies provide additional support for this view. Nearly 90% of central banks worldwide are implementing interest rate cuts, which Bittel describes as creating an "unconventional" environment and, in the long run, providing "strong impetus for the business cycle."

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 accommodative, rather than the tightening typically seen in late-cycle phases.

Historically, since the early 1970s, oil prices being 50% above trend levels has often signaled the onset of an economic recession.

Data from the Temporary Help Services industry shows "early-cycle characteristics": growth in this sector is gradually recovering from very low levels, indicating the economy is in a recovery phase rather than a downturn.

Bittel pointed out that late-cycle phases are usually characterized by "year-on-year growth slowing from positive," reflecting an overheated economy losing momentum.

He attributed the rise in unemployment rates to the lagging nature of employment data, calling it "a reflection of the past six months in the rearview mirror."

Before companies decide to hire "high-cost full-time employees with benefits and pensions," they usually 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, falling 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 is more supportive of continued market expansion rather than contraction.