This indicator points to a severe recession for the US

Bloomberg analyst Mike McLone says there are hints of a deep recession in the US. According to the analyst, the data shows a huge decline in home sales, which reminds him of the 2008 financial crisis.

But what does that mean for the price of Bitcoin? We will answer this question in this article.

As in 2008

Before we do that, it’s important to understand why Mike McClone expects to be in a major recession. McLone does this with a graph in which he makes comparisons between today and 2008.

This clearly shows how a similar divergence in home sales and US interest rates caused a massive collapse in the housing market at the time; Before the recession and interest rate cuts started.

“My chart shows that the 12-month average home sales are falling at rates last seen during the 2008 crisis,” McClone said.

Bear in the market

However, when it comes to risk assets, McLone is bullish on equities. If an analyst looks at the Russell 2000, an index of the smallest 2,000 companies in the Russell 3000 index, the analyst is currently seeing a downward trend.

That downward trend is currently in place, while liquidity is falling, and according to McClone, the market will have to wait another two years for help from central banks in the form of interest rate cuts to support it.

This could also mean a difficult period for Bitcoin. In that sense, central banks are expected to intervene soon. “The trend is down and central banks are still pumping liquidity out of the system,” McClone said.

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