The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) has historically coincided with major peaks in Bitcoin market cycles, and if this pattern repeats, this cycle could be longer than usual.
The correlation between the ISM PMI and Bitcoin (BTC) price was first popularized by Raul Pal of RealVision and has since gained traction among macro-focused cryptocurrency analysts.
Analyst Colin Tokes Crypto noted that Bitcoin market highs repeatedly overlap with PMI’s cyclical highs, noting that “all of the past three Bitcoin cycle highs have closely matched this monthly moving index.”
Collin added that if the relationship holds, “it would indicate a significantly longer period of time than the Bitcoin cycle typically runs.”
The ISM Manufacturing PMI, which measures U.S. industrial activity, has remained below the neutral 50 for seven consecutive months, suggesting an economic contraction. A sustained move above 50 has historically been associated with improved Bitcoin price performance and would suggest that the economy is expanding again.
Earlier this year, the PMI briefly rose above 50, but then returned to contractionary territory, highlighting continued weakness in the manufacturing economy.
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U.S. manufacturing struggles to maintain momentum amid tariffs and weak demand
Manufacturing PMIs indicate a strong recovery in business confidence at the start of the year, driven in part by optimism surrounding the incoming Trump administration and expectations for business-friendly policies.
However, the continued impact of high tariffs, trade policy uncertainty and weak global demand is weighing on the sector, potentially prolonging rather than accelerating the cycle.
ISM’s latest report shows that imports and exports contracted while prices rose, with modest gains in September, suggesting the situation is uneven across manufacturing subsectors.
ISM noted that despite the weakness, manufacturing’s shrinking share of U.S. economic output means a contraction in the PMI does not necessarily indicate a recession. ISM has previously observed that sustained readings above 42.3 generally correspond to overall economic growth.
Purchasing executives in the transportation equipment industry told ISM in September that “business continues to be severely depressed,” citing “exorbitant taxes” in the form of tariffs that are reducing profits and raising costs across the supply chain.
“Price pressures on both our raw materials and our customers’ output are increasing as companies begin to pass on tariffs through surcharges, raising prices by up to 20%,” they added.
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