- Raoul Pal believes crypto is in an early expansion stage, with altcoins and total market cap yet to break out.
- Historical ISM Manufacturing Index trends show alignment with Bitcoin cycle peaks, suggesting a longer current cycle.
- U.S. manufacturing weakness and rising tariffs could extend the business cycle, delaying broader market acceleration.
Global macro investor Raoul Pal believes the crypto market is in its early expansion phase, arguing that the current calm could precede an explosive growth stage. Speaking on Real Vision, Pal stated that the market’s structure does not yet reflect the “blow-off top” typical of cycle peaks.
Instead, he noted that most altcoins and the total market cap outside Bitcoin and Ethereum have yet to register meaningful breakouts. According to Pal, this subdued behavior reflects a wider, slower cycle that is quietly accumulating pressure beneath the surface.
Early Stage of Expansion Still Developing
Pal described the present stage as “the early phase of phase two,” emphasizing that the market has only just begun to break out. He noted that Bitcoin and Ethereum remain within key structural ranges, while the broader market has not confirmed full momentum.
Comparing the current setup to past parabolic rises, Pal said this cycle appears broader and more extended in duration. As a result, the charts may not appear as steep, even though expansion continues across assets.
He added that previous “banana zone” phases, periods of fast acceleration, were narrower in scope, while the ongoing cycle may span a wider time frame. That characteristic could make the move less visibly parabolic at first, even as the foundation for a stronger rally builds quietly.
ISM Manufacturing Index and Bitcoin Correlation
Pal’s macro outlook aligns with findings he and other analysts, including Colin Talks Crypto, have discussed regarding the ISM Manufacturing Purchasing Managers’ Index (PMI). Historically, peaks in this index have coincided with major Bitcoin cycle tops.
The PMI tracks U.S. manufacturing activity, and its trends have often matched key turning points in digital asset markets. Notably, the ISM index has stayed below 50 for seven straight months, indicating continued contraction in manufacturing.
A reading above 50 would signal renewed expansion, a condition historically associated with stronger Bitcoin performance. Earlier in 2025, the index briefly crossed the 50 level before slipping back, indicating ongoing industrial weakness and cautious business sentiment.
Manufacturing Contraction and Economic Pressure
ISM’s September data showed mixed results. Prices increased while exports and imports weakened, suggesting uneven performance across manufacturing subsectors. The institute clarified that manufacturing’s reduced share of U.S. output means contraction in the index does not necessarily point to an economic downturn.However, conditions remain strained. A purchasing manager from the transportation equipment industry reported severe business pressure due to high tariffs and rising costs. Companies have begun passing these costs to customers through surcharges, lifting prices by as much as 20 percent. This environment, analysts suggest, could extend the broader business cycle, potentially delaying the next major market acceleration Pal anticipates.
