The Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) has a history of aligning with key peaks in Bitcoin's market cycles – a pattern that, if repeated, could mean an extended cycle than usual this time.
The correlation between the ISM PMI and the worth of Bitcoin (BTC) was first popularized by Raoul Pal of Real Vision and has since gained traction amongst macro-focused crypto analysts.
“All three past Bitcoin cycle highs have largely aligned with this monthly fluctuating index,” noted analyst Colin Talks Crypto, pointing to the recurring overlap between Bitcoin market highs and PMI cyclical highs.
If this connection is true, Colin added, “it might indicate a significantly longer cycle than Bitcoin cycles typically last.”
Source: Colin talks crypto
The ISM manufacturing PMI, which measures industrial activity within the U.S., remained below the neutral 50 mark for seven consecutive months, indicating a decline. A sustained move above 50 would indicate renewed economic expansion, which has historically been related to stronger Bitcoin price motion.
Earlier this 12 months, the PMI briefly climbed above 50 before slipping back into decline territory, underscoring continued weakness within the manufacturing economy.
U.S. manufacturing is struggling to keep up momentum amid tariffs and weak demand
The manufacturing PMI pointed to a big rebound in business sentiment in the beginning of the 12 months, driven partially by optimism in regards to the latest Trump administration and expectations of business-friendly policies.
However, continued pressure from high tariffs, uncertain trade policies and weak global demand weighed on the sector, potentially extending the economic cycle relatively than accelerating it.
The latest ISM report showed a slight increase in September, with prices rising while exports and imports contracted, pointing to uneven conditions across manufacturing subsectors.
Despite the weakness, ISM noted that manufacturing's shrinking share of U.S. economic output means a decline within the PMI doesn’t necessarily indicate a recession. ISM has previously observed that a sustained reading above 42.3 generally corresponds to growth in the general economy.
A transportation equipment industry purchasing manager told ISM in September that “business continues to say no sharply,” citing falling profits and “extreme taxes” in the shape of tariffs which have increased costs throughout the availability chain.
“We have increased pricing pressure on each our inputs and our customers’ outputs as firms begin to pass on tariffs through surcharges, increasing prices by as much as 20 percent,” they added.
