Renowned economist Henrik Zeberg has made a bold prediction, forecasting a strong rally in both stocks and cryptocurrencies in the coming months. He believes this surge will be driven by market sentiment and a peak blow-off, potentially lasting until year-end.

Zeberg's Bullish Outlook

Zeberg's optimistic forecast is based on two key factors. Firstly, he believes the expected peak blow-off has yet to occur, leading to an oversized rally in certain stock indices, Bitcoin, and altcoins. Secondly, he anticipates market sentiment will become extremely bullish, fueling the rise. Zeberg predicts bulls will attribute the market's upward movement to developments in artificial intelligence and Federal Reserve liquidity.

A Warning of Unsustainable Growth

However, Zeberg cautions that this growth will not be sustainable. He warns of a dramatic drop once the market peaks, potentially in the third or fourth quarter of 2024, followed by a recession starting in the last quarter of the year. This recession will lead to a rapid market decline. As the S&P 500 approaches the 6,150 level, Zeberg expects enthusiasm among market participants to increase, driven by AI and liquidity. However, he warns that this enthusiasm will be a sign that the market is nearing its peak.

Short-Term Boom, Long-Term Caution

While Zeberg's analysis indicates a positive short-term outlook, he advises investors to prepare for significant corrections ahead. The current S&P 500 level of around 5,221 is expected to rise, but Zeberg's warning suggests a dramatic drop is looming. Investors should be cautious and prepared for the market's inevitable downturn.