Renowned trader Peter Brandt has caught the attention of the cryptocurrency market with his recent analysis, signaling the potential for a significant recovery in Bitcoin, similar to the stock market movement observed in the 1980s. Brandt shared his observations on the social platform X, comparing the Bitcoin chart with the US M1 money supply index (BTC/WM1NS).
Brandt emphasized the argument in favor of Bitcoin, which is related to the eventual demise of fiat currencies like the USD. He presented a graph that plots the Bitcoin price relative to the total US money supply (M1), noting that this ratio is still below the peak seen in December 2017.
The chart not only analyzes Bitcoin’s current performance in relation to monetary expansion, but it also brings to mind a pattern observed almost four decades ago. During that time, the Dow Jones Industrial Average (DJIA) was about to enter a bull market that would put an end to the stagflation of the 70s. Brandt pointed out the similarities in the chart structure with the DJIA during the period of the Great Stagflation of the 1970s, specifically mentioning the existence of a continuation inverted head and shoulders pattern, a pattern recognized by experts like Schabacker (1934) and Edwards and Magee (1948).
Brandt’s theory further suggests that if the BTC/WM1NS ratio experiences a significant breakout, it would indicate that the value of Bitcoin is surpassing the increasing amount of US dollars. This scenario could potentially lead to a substantial increase in the valuation of Bitcoin compared to fiat currency.
In addition, Brandt is optimistic about Bitcoin’s future performance against gold, predicting that the cryptocurrency will outperform the precious metal in the coming months. He believes that the ratio of ounces of gold needed to purchase one Bitcoin will decrease for another 12 to 18 months, and then rise to 100 ounces of gold to buy one Bitcoin.
As of the time of publication, the price of Bitcoin was quoted at US$69,151.08, showing a 3% increase in the last 24 hours.
Disclaimer: The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment, or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.
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