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Buckle up: Bear market probability highest in 70 years

Buckle up: Bear market probability highest in 70 years
Ana Zirojevic

With finance experts and experienced investors constantly issuing bleak warnings in relation to the macroeconomic landscape, influenced in part by the several banking giants crashing in recent weeks, the risk of a bear market is the highest in decades.

As it happens, the bear market probability model on a 20-period moving average (MA) currently stands at 0.8 points, the highest level since the 1950s or in the last 70 years, according to the chart shared by the pseudonymous financial markets analyst Game of Trades on April 28.

Bear market probability model. Source: Game of Trades

Indeed, the chart indicates that the bear market probability in the 1950s at one point stood at around 0.75, which is still lower than its level nowadays, having neared this area again only 20 years after that – in the 1970s, and the expert has advised investors to “buckle up.”

It is also worth noting that chief market strategist Gareth Soloway has predicted an “atrocious” market downturn for stocks (and beyond) in the near future, after the United States Federal Reserve (Fed) announced a “slight” and “transitory” recession, which he described as “sugarcoating,” as Finbold reported on April 19. 

Traditional finance versus crypto

Meanwhile, in less-than-traditional assets such as Bitcoin (BTC), the bear market looks to be officially over, as the flagship decentralized finance (DeFi) asset is recording a fourth consecutive month closing on a bullish note – with several green candles, as observed by Twitter user Bitcoin Archive on April 28.

Bitcoin historical candle price chart. Source: Bitcoin Archive

Bitcoin’s recent price action and sentiment have given confidence to cryptocurrency enthusiasts who see the maiden crypto asset as a hedge against inflation and prefer it over paper money, including Robert Kiyosaki, the author of the best-selling personal finance book ‘Rich Dad Poor Dad.’

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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