Renowned trader Peter Brandt has caught the attention of the cryptocurrency market with his recent analysis, drawing attention to a potential significant recovery in Bitcoin that mirrors the movement seen in the stock market during the 1980s. Brandt took to the social platform X to provide a detailed analysis, comparing the Bitcoin chart with the US M1 money supply index (BTC/WM1NS).
Brandt emphasized, “The argument in favor of Bitcoin is linked to the eventual demise of fiat currencies such as the USD. This graph… illustrates the Bitcoin price relative to the total US money supply (M1). This ratio is still below the peak seen in December 2017.”
The chart mentioned by Brandt not only examines Bitcoin’s current performance in relation to monetary expansion but also evokes memories of a pattern observed nearly four decades ago. During that time, the Dow Jones Industrial Average (DJIA) was on the cusp of a bull market that would put an end to the stagflation of the 70s. Brandt explains the similarities, stating, “It is interesting to note the similarities in the chart structure with the DJIA during the period of the Great Stagflation of the 1970s. Some of you may deny the existence of the continuation inverted H&S (head and shoulders) pattern – so I will discuss it here. Schabacker (1934) and Edwards and Magee (1948) recognize this pattern by name. If it was good enough for them to identify, then it is good enough for me.”
Furthermore, Brandt’s theory suggests that if the BTC/WM1NS experiences a significant breakout, it would indicate that the value of Bitcoin is surpassing the growing supply of US dollars. This scenario could potentially signal a substantial increase in the valuation of Bitcoin compared to fiat currency.
Brandt also holds an optimistic outlook for Bitcoin in comparison to gold, predicting that the cryptocurrency will outperform the precious metal in the coming months. He states, “Since its inception, Bitcoin has gained relative value compared to gold. This chart depicts the number of ounces of gold (GC) needed to purchase one Bitcoin. The ratio is expected to decrease for another 12 to 18 months before advancing to 100 ounces of gold to buy one Bitcoin.”
At the time of publication, the price of Bitcoin was quoted at US$69,151.08, reflecting a 3% increase in the past 24 hours.
Disclaimer: The opinions expressed by the author or any individuals mentioned in this article are solely for informational purposes and do not constitute financial, investment, or other advice. Investing or trading in cryptocurrencies carries the risk of financial loss.
