Yield Curve Inversion Raises Serious Recession Fears: Analyst

In one of his latest YouTube videos, cryptocurrency market analyst Benjamin Cowen, shared that there may be a recession around the corner based on the yield curve. Cowen based his prediction off of the fact that the 3M – 10Y yield curve is inverted.

An inverted yield curve occurs when the yield on the short-term (3-month) bonds exceeds that of the long-term (10-year). The analyst pointed out that inversions like this have occurred at various points in history, one of which took place in October of 2022. It has thus been approximately one year since the inversion occurred.

Cowen emphasized the point that, historically, yield curve inversions have often been viewed as a harbinger for economic challenges, or in this case, a recession. The inversion observed in 2019-2020, while complicated by the pandemic’s impact, still aligned with this pattern, according to the analyst.

In most cases, Cowen explained that the inverted yield curve suggests that investors are concerned about the short-term economic outlook, leading to higher demand for long-term bonds and, consequently, lower yields on these bonds. Cowen thus believes this inversion can be seen as a signal of uncertainty and potential economic slowdown.

Considering the fact that the 3M – 10Y yield curve is currently inverted, the analyst firmly believes that there could be some economic uncertainty or even a recession around the corner. He is certain that this could impact all financial markets, including the cryptocurrency space.

Meanwhile, the total cryptocurrency market cap experienced a 0.66% decline over the past 24 hours of trading. As a result, the global cryptocurrency market capitalization stood at around $1.08 trillion at press time.

Additionally, almost all of the top 10 tokens by market cap saw their prices slip throughout the past day, with only Cardano (ADA) being able to record a 1.50% increase in its price. The leading cryptocurrency, Bitcoin (BTC), experienced a 0.59% price decrease while the altcoin leader, Ethereum (ETH) saw its price fall by 1.28%.

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