For the first time since its inception in January 2009, Bitcoin (BTC) has lagged behind gold in performance, with the precious metal reaching new record highs while BTC has stagnated. However, analyst Peter Brandt believes this trend is poised to reverse, forecasting a four-fold increase in the BTC/GLD ratio by 2025.
Brandt shared his insights on Twitter, indicating a “Continuation of the Inverted Head and Shoulders pattern,” with a neckline at 32.5 to 1. He noted that the left shoulder reached a low of 14.2 to 1, while the right shoulder is currently forming a flag formation. This technical setup is often seen as a strong bullish signal; when the price breaks above the neckline, it typically leads to a significant rally.
While Brandt cautioned that the ratio might decline to the high teens before recovering, he set a target of 123 to 1 for the BTC/GLD ratio. Presently, the ratio stands at 24, suggesting that an increase to 123 would represent a staggering 413% rise. Given gold’s current price of $2,654.60, this would imply a Bitcoin price exceeding $262,000 if the gold price remains stable.
Bitcoin analyst Willy Woo responded to Brandt’s observations, pointing out the striking similarity between the BTC/GLD chart and Bitcoin’s performance against the U.S. dollar. He humorously invited gold proponent Peter Schiff to weigh in on the discussion.
Analyst Bitcoinsensus highlighted that the recent surge in the M2 money supply is a potential catalyst for Bitcoin’s resurgence. Lyn Alden noted that as global liquidity expands, Bitcoin tends to thrive, serving as a “liquidity barometer.” Historical data shows a correlation between Bitcoin’s price movements and changes in global liquidity, with Bitcoin rising in tandem with increases in liquidity and suffering during contractions.
The Federal Reserve’s recent 50 basis point rate cut, coupled with indications of further cuts in 2024 and 2025, is expected to enhance global liquidity and the M2 money supply, which may bolster Bitcoin’s price.
Data from Trading Economics reveals consistent month-over-month growth in the M2 money supply, a trend that began in February 2024. This increase has been instrumental in supporting asset prices, contributing to record highs for stocks and gold in recent months.
With the influence of monetary policy on asset performance evident across various markets, the continued support from central banks through lower interest rates and quantitative easing could drive further growth. However, the sustainability of this upward trend remains a topic of debate.
TradingView analyst Xanrox expressed optimism for Bitcoin, describing it as a “lifetime opportunity” for investors and traders. He anticipates a 100% to 80% profit by year-end, forecasting a significant price pump as the bullish flag pattern concludes. Xanrox advised taking profits at the long-term trendline established from 2017 to 2025, as well as considering Fibonacci extension levels for additional profit targets.
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