A recession can actually cause a bull run

A lot of people believe that a bull run over the next year is not possible because of the economic conditions. You will see people saying that we can can't have a bull run because no one can afford to buy crypto or that the Fed will keep rates high and keep increasing them.

I think they are making a big mistake. If a recession happens and inflation subsides (and it has already done that anyway *) then that will be the spark for a bull run. There is a lot of money waiting to come into the markets from institutions and the wealthy. In crypto specifically that money has also been parked in stable coins. A bull run does not need those struggling with living costs to buy into it.

If this sounds unrealistic to you then just observe how the Covid recession and the 2008 one both lead to massive bull runs. Whenever there is a significant economic slowdown or worse a crisis then the Fed will lower rates and do QE. Thus the last two recessions have both lead to massive bull runs just because the Fed used QE and rate cuts to ease the crises. They also did it in 2019 when there was a crisis in the repo market. Most people just saw the rates come down without knowing why: What’s Behind the Fed’s Bailout of the Repo Market? | Wolf Street

The interest rate rises of the last year could themselves cause another crisis in a levered market like it did in the UK pension market a few months ago. Do not think to yourself that these high rates are sustainable. Something will break and the Fed will need to turn on the money printer again. It takes months for interest rates to impact certain parts of the economy and we could we seeing a potential crisis in the future and hence another money printing season.

* CPI has been flat for six months. There has been no CPI measured inflation in that time. CPI isn't falling unlike what most people think. Just because the current CPI rate is 6.5% over the last year doesn't mean there has been inflation over the last few months.

TLDR: Economic conditions will cause the Fed to pivot and cause a bull run like it has done in the past two recessions.

Edit: Someone claimed that there has been inflation in the last 6 months. In the US the CPI has been flat. Look at this chart: United States Consumer Price Index (CPI) - December 2022 Data - 1950-2021 Historical (tradingeconomics.com)

The 6.5% increase is from this time last year.

Edit 2: I want to add that markets anticipate things in advance. Some traders will attempt to anticipate rate cuts even months before the Fed announces them. This is why you see stocks rising and bond yields below the Fed target. QE is a new phenomenon and the markets are getting quicker at anticipating it before a recession.