Aurelie Barthere, Chief Research Analyst at on-chain analytics platform Nansen, expressed significant concerns regarding the current economic landscape, citing ongoing problems in the Eurozone and China.
Eurozone growth has been stagnant since the 2022 energy crisis, exacerbated by the war in Ukraine and potential U.S. tariff hikes, while China's economic slowdown due to its deflating property bubble is adding to global economic uncertainty, Barthere said recently.
Barthere noted that the U.S. economy is also experiencing a slowdown, although there is no immediate, specific vulnerability beyond high equity market valuations. The analyst warned that a correction in equities and risk assets could tighten financial conditions, potentially triggering an economic downturn.
Barthere predicted a 40% chance of a recession in the second half of 2024, a 30% chance of a shallow recession and a 10% chance of a more severe downturn, significantly higher than the historical average of 17%.
In the digital assets space, Valentin Fournier, an analyst at BRN, observed that Bitcoin is showing some upward pressure after recently falling below $50,000. Despite this positive move, Fournier noted that Bitcoin needs strong catalysts to overcome the ongoing challenges.
Looking ahead, Fournier noted that upcoming economic indicators, including initial jobless claims and next Wednesday’s Consumer Price Index (CPI) data, could provide insight into the health of American job creation and the Fed’s ability to navigate potential economic turbulence. Medium-term factors such as potential rate cuts, the US election, and the creation of a strategic national Bitcoin reserve under a potential Trump administration could also influence market dynamics in the coming months, according to the analyst.
*This is not investment advice.