Central Bank's large-scale interest rate cuts + low confidence index: the encryption bull run may have just begun

Although some investors believe that the cryptocurrency market is nearing its cycle top, the latest analysis from Julien Bittel, head of global macro research, indicates that several key indicators, from economic confidence to Central Bank policies, suggest that the current bull run cycle is still in its early stages.

Market sentiment and data show divergence

Bittel pointed out in the analysis on X (formerly Twitter) on September 8 that late-cycle economies are usually accompanied by extremely high confidence in manufacturing and service industries, optimism among builders, soaring consumer and labor sentiments, and accelerating wage growth.

However, after integrating the data from ISM, NAHB, NFIB, BLS, AAII with the World Federation of Large Enterprises, he found that economic confidence in the United States remains low, which is vastly different from the "overheated optimism" of the later cycle, and resembles more the early cycle that is accumulating momentum.

Central Bank policy releases easing signals

Nearly 90% of central banks around the world are cutting interest rates, which Bittel describes as a "very rare" phenomenon that provides strong momentum for the future business cycle.

The trend of oil prices also supports the early cycle argument — currently, oil prices are nearly 20% below trend levels and continue to decline, indicating that the financial environment is easing rather than the tightening pressure typical of the late cycle. Historical data suggests that when oil prices are 50% above trend, it often signals an economic recession, whereas the current situation is clearly the opposite.

The labor market shows signs of recovery

The growth rate of temporary assistance services is rebounding from a low level, reflecting economic recovery rather than recession. Bittel pointed out that the rise in unemployment is more of a lagging effect of employment data—companies typically first increase overtime and temporary workers before deciding to hire full-time employees.

He positions the current transition from the "early phase" to the "mid phase", known as the "macro spring" (growth rising, inflation declining), moving towards the "macro summer" (growth and inflation rising in sync).

Insights into the encryption market

Bittel believes that these macro signals contradict the sentiment of some investors in the encryption market that the "bull run has peaked."

Under the combined effects of loose monetary policy, weak economic confidence, and a recovering labor market, the market is more likely in the early stages of expansion rather than contraction. For crypto investors, this means that the bull run may still have considerable upside potential.

Conclusion

The current macro environment—Central Bank interest rate cuts, oil prices below trend, and a low confidence index—is starkly different from a typical late-cycle scenario. Bittel's perspective provides an alternative interpretation for the Crypto Assets market: rather than worrying about "the peak has been reached," it may be more accurate to recognize that this could just be the prologue to a bull run.