- Bitcoin’s market cap has surged 350,000%, outperforming gold and signaling strong adoption.
Analysts debated BTC’s future, with differing views on the reliability of technical patterns.
As a researcher with years of experience in the cryptocurrency market, I find myself constantly intrigued by the ongoing debate surrounding Bitcoin and its potential future. The latest surge past the $60,000 threshold is indeed a remarkable achievement, but it’s not just about the short-term price action.
After overcoming the crucial barrier of $60,000, Bitcoin [BTC] is currently being traded at $63,450, which represents a major achievement following several weeks where it faced strong resistance.
Although there was a slight 0.02% decline over the past day, technical signs such as the Relative Strength Index (RSI) still point towards robust optimism among buyers. At present, this index stands above the neutral threshold, registering at 62.
Bitcoin gains momentum against gold
Despite momentary fluctuations in Bitcoin’s price, its market value has skyrocketed an astonishing 350,000% from the start, dwarfing the growth of gold, a longstanding symbol of financial security, by a considerable margin.
Indications point towards Bitcoin potentially experiencing a prolonged surge in value, emphasizing its increasing strength compared to gold.
For those unaware, the BTC/GLD ratio tracks the performance of Bitcoin relative to gold.
Measuring this figure is crucial because it helps us understand Bitcoin’s growing popularity and its impact on other markets, specifically gold, as Bitcoin has consistently shown better performance compared to gold in recent times.
Shedding light on the same, Veteran analyst Peter Brandt took to X noted,
What is Brandt trying to explain?
As a crypto investor, I’ve come across a fascinating prediction by Brandt. He foresees a significant increase in the Bitcoin-to-gold ratio, potentially soaring over 400% by the year 2025. This projected surge is attributed to a well-recognized technical pattern called the inverse head-and-shoulders (IH&S).
From my years of trading experience, I’ve noticed that a specific pattern often emerges when analyzing price charts: a formation consisting of three troughs, with the middle one (the head) being significantly deeper than the two outer ones, which are referred to as the left and right shoulders. This formation is particularly intriguing because it can potentially indicate a reversal in the market trend. It’s like watching a rollercoaster dip sharply at its highest point before climbing back up again, offering an opportunity for savvy traders to capitalize on the subsequent uptrend.
These troughs are found under a shared horizontal line known as the “neckline”. This line plays a crucial role as it often signals a significant breakout moment.
Based on technical analysis guidelines, a valid IH&S (Inverted Head and Shoulders) pattern occurs when the price moves beyond the resistance line (neckline), often coinciding with an increase in trading activity.
Based on my years of trading experience, I’ve observed that when a stock experiences a ‘breakout’, it often leads to a rally that can reach the maximum gap between the ‘neckline’ and the lowest point of the ‘head’ (a technical analysis term). This pattern has proven useful for me in predicting potential price movements, although it is not foolproof. I always remind myself to exercise caution and do thorough research before making any investment decisions.
By examining the BTC/GLD ratio graph, Brandt foresees a potential increase in Bitcoin’s value, with one Bitcoin potentially equating to approximately 123 ounces of gold by the year 2025 – a significant jump from its current value of 24 ounces of gold as of September 2024.
Critics dismiss Brandt analysis
As a researcher examining Bitcoin, I’ve noticed that most of my peers generally align with Brandt’s perspective. However, there’s one exception – the long-standing Bitcoin skeptic, Peter Schiff, who presents an opposing argument.
Schiff argued that although technical patterns can be informative, they do not guarantee outcomes.
He warned that there is always a risk that the expected move—in this case, a significant increase in the BTC/GLD ratio—may fail to materialize, potentially leading to substantial losses instead.
In fact, recently, Schiff also argued that Bitcoin does not qualify as money, and stated,
Among all commodities, money appears to be the most universally accepted and valuable. However, Bitcoin lacks this inherent worth. It serves primarily as a medium for trading and speculative purposes. Unlike traditional money, Bitcoin does not function like gold in everyday transactions.
In response to my statement, Jack Mallers from Strike offered a pointed rebuttal. He particularly refuted my point effectively by saying, “I respectfully disagree with your perspective.
As a researcher delving into monetary systems, I find myself intrigued by Bitcoin (BTC). In my opinion, it stands out as the most exceptional form of currency in human history. Its scarcity is unparalleled, with a fixed supply that sets it apart from other currencies. This inherent scarcity makes it highly portable and divisible, attributes that have been valued throughout history.
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2024-09-24 23:04