Is Bitcoin Following An Explosive 1970s Gold Fractal?
Bitcoin price could be following a fractal of gold during the 1970s – the last time inflation in the United States got out of control.
What followed was a recovery of over 700% in the precious metal. Will the same happen with digital gold?
Bitcoin follows 1970s gold fractal price
Over the past week, both Bitcoin and gold have rebounded after widespread bank runs and failures. Gold is up about 10% on the year, while BTC is close to a 70% return.
With bank stocks plummeting and the largest cryptocurrency by market capitalization rising, the price of BTC in banks makes for some of the most shocking and awe-inspiring price charts you could imagine.
That shock and awe may continue, if a BTC fractal following 1970s gold continues to unfold. In the 1970s, the US inflation rate reached over 10% and double digits were not uncommon in the early 1980s.
During the worst, gold surged by more than 750%, from $100 to $850 per troy ounce of the precious metal. Now that same price fractal is potentially back in Bitcoin, as is rising inflation.
Bitcoin today versus 1970s gold | BTCUSD on TradingView.com
The fastest horse in the race against inflation
During the 2020 bull run, billionaire investor and philanthropist Paul Tudor Jones said that Bitcoin could be the fastest horse in the race against inflation, referring to 1970s gold.
Inflation hit double digits for the first time in 1974, just three years after US President Richard Nixon announced that the US would no longer be convertible from dollars to gold at a fixed price of $35 an ounce.
Gold went parabolic, first experiencing a pullback in 1974 when inflation overheated. After a two-year correction, gold spent the next few years rising by more than 750%.
Bitcoin price also corrected strongly when inflation first rose, but after two years it is starting to show resilience. In the future, it could be the digital equivalent of gold in the 1970s, helping investors beat inflation or a banking crisis.
In the price fractal above, gold has completed a wave 5 after an expanded flat correction, according to the Elliott Wave Principle. In commodity markets, wave 5 tends to be extended. With BTC being classified by the SEC and CFTC as a commodity, could the crypto asset perform similarly?
If BTCUSD followed suit with a 750% return from recent lows, it would take Bitcoin to over $132,000 per coin. Could this be what’s to come for the first cryptocurrency?
In the Elliott Wave Principle, commodity waves 5 are the longest and strongest.
With #Bitcoin labeled as a commodity by the SEC and CFTC, will it exhibit this commodity-like market behavior? Here is a comparison with #Gold In the 1970’s. $BTC vs $ bye pic.twitter.com/I6ifTOtz8V
— Tony “The Bull” (@tonythebullBTC) March 20, 2023