Veteran trader Peter Brandt has captured the attention of the cryptocurrency market with his recent analysis, pointing to a possible major recovery in Bitcoin, similar to the movement seen in the stock market during the 1980s. In a post on the social platform X, Brandt detailed his observations comparing the Bitcoin chart with the US M1 money supply index (BTC/WM1NS).
Brandt highlighted, “The argument in favor of Bitcoin is related to the eventual destruction of fiat monetary units (e.g. USD). This chart… plots the price of Bitcoin BTC relative to the total US money supply (M1). This ratio remains below the December 2017 maximum.”
The chart mentioned by Brandt not only analyzes Bitcoin’s current performance compared to monetary expansion, but also brings back memories of a pattern seen almost four decades ago. At that time, the Dow Jones Industrial Average (DJIA) was about to begin a bull market that would end the stagflation of the 1970s. Brandt explains the similarity, “It is interesting to note similarities in the chart structure with the DJIA during the period of the Great Stagflation of 1970s. Some of you will deny the existence of continuation inverted H&S (head and shoulders) – so I will discuss that here. Schabacker (1934) and Edwards and Magee (1948) recognize this pattern by name. If the identification is good enough for them, then it will be good enough for me.”
The argument for Bitcoin relates to the eventual destruction of fiat currency units (e.g., $USD)
This chart on right plots price of Bitcoin $BTC in relationship to total U.S. money stock (M1). This ratio remains below the Dec 2017 high. Interesting to note similarities in chart… pic.twitter.com/yQEAm3lMAX— Peter Brandt (@PeterLBrandt) June 1, 2024
Furthermore, Brandt’s theory suggests that if BTC/WM1NS experiences a significant breakout, it would indicate that the value of Bitcoin is outpacing the growing amount of US dollars. This scenario could signal a considerable increase in the valuation of Bitcoin compared to fiat currency.
Brandt is also optimistic about Bitcoin’s future against gold, predicting that the cryptocurrency will outperform the precious metal in the coming months. He mentions, “Since its inception, Bitcoin BTC has gained relative to gold. This chart shows the number of ounces of GC (gold) to buy one BTC. The ratio should decrease for another 12 to 18 months – then advance to 100 oz of GC to buy one BTC.”
At the time of publication, the price of BTC was quoted at US$69,151.08, up 3% 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.
Source: https://portalcripto.com.br/bitcoin-pode-repetir-historico-de-recuperacao-do-mercado-de-acoes-sugere-peter-brandt/
