Wedson highlighted the major trends of the Labor Force Participation over the last two decades and its impact on the S&P 500 index. According to the highlighted data, participation reached its peak around 2000, before collapsing during 2008 financial crisis, briefly recovering, and then falling to historic lows during the COVID-19 pandemic.
As the labor force participation rate dwindled, the S&P 500 soon followed despite its initial show of resilience. The same can be seen for Bitcoin in the chart below, which seemed to succumb to the macro stress each time the LFP suffered a nosedive.
Wedson wrote in his post:
A falling participation rate means fewer people working, less consumption, weaker real economic output. The stock market can diverge from that reality for a while but not forever.
According to the Alphractal founder, the specific risk for Bitcoin is a macro shock that triggers a risk-off behavior among investors, with most market participants fleeing to safety before the next accumulation phase begins. And, as rightly baked in the steadily-declining Coinbase Premium, the demand for BTC among US investors seems to be in a steady downturn.
Bitcoin Price OverviewAs of this writing, the flagship cryptocurrency is valued at around $66,750, reflecting a roughly 1% jump in the past 24 hours. The single-day action has not been enough to wipe out losses from the past week, which still stand at more than 5%.
