The Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) has historically aligned with major peaks in Bitcoin market cycles — a pattern that, if repeated, could imply a longer-than-usual cycle this time around.
The correlation between the ISM PMI and the price of Bitcoin (BTC) was first popularized by Raoul Pal of Real Vision and has since become popular among macro-focused crypto analysts.
“All three past peaks of the Bitcoin cycle have largely been aligned with this monthly, oscillating index,” analyst Colin Talks Crypto recordedciting the recurring overlap between Bitcoin market peaks and cyclical PMI peaks.
If that relationship exists, Colin added, “that would mean a considerably a longer cycle than bitcoin cycles usually last.”
The ISM Manufacturing PMI, which measures US industrial activity, has remained below the neutral 50 mark for seven consecutive months, signaling a contraction. A sustained move above 50 would signal renewed economic expansion, historically associated with stronger Bitcoin price performance.
Earlier this year, the PMI briefly rose above 50 before slipping back into decline territory, highlighting continued weakness in the manufacturing economy.
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US manufacturing struggles to maintain momentum amid tariffs, weak demand
The manufacturing PMI signaled a strong recovery in business sentiment at the start of the year, partly attributed to optimism surrounding the new Trump administration and expectations of business-friendly policies.
However, continued burdens from high tariffs, uncertain trade policies and weak global demand have weighed on the sector, potentially lengthening the business cycle rather than accelerating it.
The latest ISM report showed a modest increase in September, with prices rising while exports and imports declined, indicating uneven conditions across manufacturing sub-sectors.
Despite the weaknesses, the ISM noted that the decline in manufacturing’s share of US economic output means that a decline in the PMI does not necessarily mean a recession. The ISM previously noted that a sustained reading above 42.3 generally corresponds to growth in the broader economy.
One purchasing manager from the transportation equipment industry told ISM in September that “business remains in a serious depression,” citing shrinking profits and “extreme taxes” in the form of tariffs that have driven up costs throughout the supply chain.
“We have increased price pressures on both our inputs and customer outputs as companies have started to pass on tariffs through surcharges, raising prices by up to 20 percent,” they added.
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