Is A Bear Market In Equities Unfolding?

The below is an excerpt from a current edition of Bitcoin Magazine Pro, Bitcoin Magazines premium markets newsletter. To be amongst the very first to get these insights and other on-chain bitcoin market analysis directly to your inbox, subscribe now.Bear Market Rallies In todays issue, we will review the ever-changing characteristics in tradition markets, with a focus on the history of U.S. equity bear markets.At the time of writing, the S&P 500 equity index is 8.5% off the lows while still being 13.2% below its all-time high peak. While nothing is for specific, our base case is that the equity market remains in the middle of a bear market relief rally. Shown listed below is todays market overlaid with previous sustained bearishness of the past throughout the Great Recession and 2000s Dot-Com Bubble.Significant, prolonged unfavorable SPX returns after major peaks.While this isnt meant to trigger worry, it is meant to give readers context regarding what remains in the realm of possibility. When referring to history, and provided todays environment, the Federal Reserve has actually openly stated it is trying to reverse engineer a wealth result to stomp out consumer rate inflation with monetary policy. With this in mind, its probable that the worst has yet to come for the U.S. equity market. In specific, one need to comprehend that historic bear markets have seen multiple rallies throughout that convinced many that the worst was over, just prior to turning over for the next leg lower. Shown below are the bearish market in the S&P 500 during the Dot-Com bust and the Global Financial Crisis. Negative SPX returns after the significant peak from 2000-2002. Unfavorable SPX returns after the major peak from 2007-2009. U.S. Treasuries Continue To Face Downside PressureDespite the current rally in equities, the bond market has actually meaningfully reversed and resumed its sell-off as treasury yields across the period curve continue to increase in the face of inflationary pressures. For investors, this is really significant, as it shows that investors think that inflation is more powerful than numerous expect at this phase still, and bonds are falling as a result. At the time of composing, the 10-year treasury is trading with 3.03% yield, just except its 2022 high of 3.20%. U.S. Treasury Bond yields are rising.U.S. Treasury Bond yields are rising.While bitcoin is still subject to its own native market dynamics and forces, the strong correlation in between bitcoin and U.S. equities is most likely to stay elevated for the foreseeable future, with all global properties subject to the recedes and flows of the international liquidity tide, to both the advantage and disadvantage.

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