Crypto market is about to go into growth thanks to macroeconomic signals

Data from LSEG Datastream shows that macro indicators are simultaneously emitting signals that could signal a new growth cycle for Bitcoin and the crypto market. As financial conditions become more favorable, global money supply expands and previous cyclical patterns repeat, there is reason to believe that Bitcoin may still be in a growth phase and not yet peaked.

One of the most important factors is the correlation between Bitcoin and the ISM (Institute for Supply Management) an important measure of the health of the US economy. Historical data shows that Bitcoin tends to grow strongly when the ISM crosses the 50 mark. Currently, ISM is recovering, which could create a favorable macro environment for the crypto market.

Besides, the ISM-based Bitcoin valuation model also shows a strong correlation between these two factors. As the ISM rises, Bitcoin tends to be more highly valued, which reinforces the possibility that BTC could continue to rise if the ISM maintains its recovery momentum.

Not just Bitcoin alone, the capitalization ratio of altcoins to Bitcoin is also showing signs of rising again. Historically, as ISM grew and financial conditions eased, cash flows tended to flow from Bitcoin to altcoins, creating an Altcoin Season. If this trend continues, investors may see a boom in altcoins in the near future.

The global money supply (M2) also plays an important role. The relationship between Bitcoin and M2 suggests that BTC's sharp bullish cycles often coincide with periods of money supply expansion. Currently, global M2 is showing signs of growth again, which could provide additional liquidity to the crypto market and provide momentum for Bitcoin's next rally.

The Bitcoin cycle chart shows that BTC may be leaving the Boring Zone and entering the Banana Zone of the most explosive period in previous cycles. During previous bull runs, Bitcoin went through a period of accumulation before a sharp rise in the parabolic pattern. If history repeats itself, Bitcoin could be at the stage of preparing for a significant upswing.

At the same time, the Bitcoin Cycle Peak Finder (CTF) indicator has not yet reached the highs of previous cycles. This could indicate that Bitcoin has not yet peaked and that there is still room for growth, at least in the short term.

Macroeconomic factors are also supporting the positive picture of Bitcoin:

• The GMI Financial Conditions Index, which has a nine-month lag behind the ISM, rose above 55.7, signaling that financial conditions may continue to ease, providing support for risky assets such as Bitcoin.
• ISM New Orders, the ISM's one-month lead indicator, is rising, indicating that manufacturing demand is recovering — a positive signal for the economy and financial markets.
• The macro overbought/oversold indicator has not yet reached the Danger Zone, indicating that the market may still be in the growth zone before a sharp correction occurs.

Summing up all the data, Bitcoin and the crypto market are facing an important stage. The ISM rebound, M2 money supply expansion, easing financial conditions, and earlier cyclical patterns are all favoring a new round of growth. If history repeats itself, Bitcoin may not have peaked yet and still have residual growth, while cash flows may begin to shift to altcoins, creating an Altcoin Season.

Investors need to closely monitor overbought/oversold indicators to manage risk, but for now, macro factors are favoring a continued growth scenario for Bitcoin and the crypto market.