Bitcoin’s market cycles may be extending as the ISM Manufacturing Purchasing Managers’ Index (PMI) reveals ongoing economic struggles, suggesting a prolonged recovery phase. The Institute for Supply Management’s PMI has been linked with significant peaks in Bitcoin’s past cycles, an indication that this trend might repeat itself leading to a longer duration for the current Bitcoin market cycle.
The connection between ISM PMI and Bitcoin’s price was notably discussed by analyst Raoul Pal of Real Vision, and has gained traction in discussions among cryptocurrency analysts focused on macroeconomic trends.
“All 3 past Bitcoin cycle tops have broadly aligned with this monthly, oscillating index,” noted Colin Talks Crypto, emphasizing the correlation between Bitcoin’s highs and the PMI peaks.
Translation: “All three previous peaks in the Bitcoin cycle have closely aligned with this monthly, fluctuating index.”
If this trend continues, analysts predict a notably longer market cycle than typical for Bitcoin.
The ISM Manufacturing PMI, which gauges industrial activity in the US, has been under the neutral mark of 50 for seven months, indicating contraction. Surpassing this mark in the future would typically signal economic growth, often corresponding with a positive cycle for Bitcoin prices.
Earlier in the year, the index briefly surpassed 50 but has since indicated a renewed downturn in manufacturing performance.
US Manufacturing Faces Challenges with Tariffs and Diminished Demand
The Manufacturing PMI initially reflected positive business sentiment earlier in the year, partially fueled by optimism surrounding new business-friendly policies following a presidential transition. However, prolonged tariffs, unpredictable trade policy, and declining global demand have created persistent pressures on the industry.
Recent reports from ISM showed a small increase in the index in September, but signals of uneven conditions across different manufacturing sectors persisted.
Despite these challenges, ISM notes that a decline in the PMI does not inherently indicate a recession for the overall economy, suggesting that a leeway reading above 42.3 typically corresponds with broader economic growth.
A purchasing manager from the transport equipment sector expressed that “business continues to be severely depressed,” indicating external pressures including increased taxes linked with tariffs, driving up costs significantly across the board.
“We have increased price pressures both to our inputs and customer outputs as companies are starting to pass on tariffs via surcharges, raising prices by up to 20 percent,” they remarked.
Translation: “We are facing increased cost pressures on both our resources and customer pricing as businesses begin to transfer tariff costs through additional fees, resulting in price hikes of nearly 20 percent.”
