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Inverted Yield Curve Suggests 50% Market Crash

As long as there is an inverted yield curve there should be concerns for a market crash. The yield curve has been inverted for a very long time, approximately 500 days. This is the lengthiest inverted yield curve since 1929. There is a correlation between the length of the inverted yield curve and the size of a market crash. The longer the yield curve is inverted, the harder the market will crash. The 500 day duration of the inverted yield curve correlates to a 50%+ market crash.

Q1 was my target date for a market crash, but the Fed continues to pause and cause delays. Yesterday I discussed how BTC has historically been bearish in Q1 during the year of the halving. This current year has been different, and there is a risk of bearish price action for equities and crypto around Q2 or Q3.

I would continue to be cautious over the next few months because a black swan can occur at a moment’s notice. I would also position accordingly with a hedge, stop losses for longs, cash on the sidelines, etc.

I was hoping the markets would get the crash over with so that we can enjoy a crypto bull run without the risk of a crash. Instead, we still have a very lengthy inverted yield curve after the Bitcoin halving. Caution will be important until we finally get that crash. The best case scenario is a bullish rally until the Fed pivot with no black swan.

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