Signs of Recession Fade Away in the Economy, Could Be Bullish for Cryptocurrencies

Leading U.S. economic indicators are still pointing to a slowdown, but they are no longer pointing to a recession.

This is seen as a positive sign for risk assets, including cryptocurrencies.

The Conference Board’s Leading Economic Indicators (LEI) fell 0.6 percent to 100.4 in July, following a 0.2 percent decline in June. The indicator peaked in the second quarter of 2022 and has been on a downtrend since then.

The LEI is comprised of several forward-looking indicators, including average weekly hours worked in manufacturing, weekly initial claims for unemployment insurance, the ISM new orders index, stock prices, and the leading credit index.

The indicator helps identify shifts in economic trends and turning points in financial markets, and is generally considered one of the most reliable signals of a recession, which is defined by consecutive quarterly contractions in the growth rate.

Bullish for Bitcoin and Altcoin Investors

The decline in the LEI points to challenges ahead for the economy. However, the annualized six-month rate of change narrowed to -2.1 percent in July from -3.1 percent in June, suggesting a reduced risk of recession.

“The LEI continues to decline on a monthly basis, but the six-month annualized growth rate no longer points to an impending recession,” Justyna Zabinska-La Monica, senior director of business cycle indicators at the Conference Board, said in a statement.

This data could be reassuring for Bitcoin and Altcoin investors. Given the recent market decline and the resulting negative sentiment, a potential upside move in stocks and cryptocurrencies could now be stronger.