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Evidence is piling up that a new crypto bull market is about to begin as a key US economic gauge nears the final stages of its two-year downtrend.
That’s the view of Kevin Kelly, co-founder of research firm Delphi Digital, who argued in a series of tweets that cryptocurrencies and risk markets broadly track the ISM Manufacturing Index, a key indicator of the state of the US economy.
“It looks like the ISM is nearing the final stages of its two-year downtrend,” he said. “BTC’s YoY% change usually shows signs of a reversal near bottoms in the ISM YoY. And so far, that’s exactly what we’ve seen this time around.”
Evidence is piling up that we're in the early stages of a new cycle
Risk assets like stocks + crypto have been sniffing this out all year (as we've been noting @Delphi_Digital)
This isn't just another bear market rally IMO
Stick with me here cause it'll all come full circle…
— Kevin Kelly (@Kevin_Kelly_II) August 14, 2023
Kelly said it’s remarkable how closely the ISM has tracked the trajectory of previous market cycles, including the timing of peaks and troughs,
“This is the real kicker IMO,” he said. “Every 3.5 years it’s rinse and repeat, like clockwork.”
In fact, BTC's YoY% change usually shows signs of a reversal near bottoms in the ISM YoY
And so far, that's exactly what we've seen this time around… pic.twitter.com/l2aG8Z1neg
— Kevin Kelly (@Kevin_Kelly_II) August 14, 2023
Such turning points in the business cycle have historically been ripe opportunities to increase risk exposure, he said.
“We’re more likely in an environment akin to one like 2015-2017,” he said. “The more I stare at the charts, the more I believe this scenario is the highest probability one given where we are at the moment.”
For the Delphi Digital co-founder, the “catalysts are stacking up” and if market participants look beyond the short-term things will be “significantly brighter in the next “12-18 months.”
Crypto markets have battled a lot of "heavyweight narratives" over the last 18 months
But if we look beyond the short-term trade, the outlook for the next 12-18 months is significantly brighter from where I'm sitting
The catalysts are stacking up…
— Kevin Kelly (@Kevin_Kelly_II) August 14, 2023
Positive Fundamentals May Trigger a New Crypto Bull Run
Bitcoin (BTC) price has been oscillating around the $30,000 mark since April with the $32,000 hurdle proving difficult to overcome. However, some analysts believe that positive developments in the crypto space such as spot Bitcoin ETF applications, the likely imminent end of interest rate hikes, and increased institutional adoption and entry into the Web3 ecosystem could help trigger a sustained recovery.
For example, PayPal, the online payments giant, launched its US dollar-backed stablecoin PayPal USD (PYUSD) last week. PayPal users can now buy PayPal USD, transfer it to compatible external crypto wallets, make peer-to-peer payments, pay for purchases, and use it to convert any of PayPal’s supported cryptocurrencies.
PayPal is a significant player in the financial industry and according to an X user Player 456, PYUSD was a big move that could trigger a crypto bull run.
Whenever paypal makes big moves
bull market is near
Paypal announced no fees to buy crypto through their app 2020
2021 we fucking mooned pic.twitter.com/CQxc6xszSs
— Player 456 🉐🧩⚡️ (@kryptodurant) August 9, 2023
According to Player 456, the 2021 crypto bull market came after PayPal launched a service to enable people to buy, send and hold crypto in 2020. He believes with this latest move, the market may recover in the coming year.
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