The ISM Manufacturing PMI inched up to 47.2 in August 2024, from a low of 46.8 in November 2023, but fell short of market expectations of 47.5. This marks the 21st contraction in U.S. factory activity over the past 22 months, continuing the sluggish performance in the manufacturing sector. The report highlights the ongoing impact of the Federal Reserve's elevated interest rates on the industry.
The recent ISM Manufacturing Index report suggests that U.S. stocks may be overvalued by about 20%, and it challenges the narrative of an upcoming liquidity cycle, as the index's continued decline indicates worsening liquidity conditions.
10x research highlights the gap between backward-looking news and real-time data, emphasizing the importance of forward-looking analysis to anticipate market trends.
This approach is especially relevant in the crypto space, where past events like the lack of ETF and stablecoin buying activity in early 2024 contributed to Bitcoin's price consolidation. On-chain analytics, particularly the behavior of short-term and long-term holders, plays a critical role in understanding market sentiment. Peaks in the supply held by short-term holders marked the end of previous bull markets, and with this indicator peaking in April 2024, the data suggests the current bull market may have also reached its peak. Long-term holders, or "whales," selling into rallies have suppressed Bitcoin's price growth, leading to consolidation. As these short-term holders stop buying, prices are expected to decline, with a drop below $50,000 seen as inevitable.
In the current complex market environment, preserving capital is key, as risks for assets like Bitcoin remain high amid U.S. political uncertainties and weak economic indicators. Falling protocol revenues and reduced Bitcoin usage also signal trouble, making it crucial for traders to stay informed, though many are unaware of these fundamental risks.
Reference: 10x research, 99% of Bitcoin / Crypto Traders Do NOT KNOW THIS