U.Today – Peter Brandt, a seasoned trader known for his insightful market insights, recently made a compelling case for , highlighting the potential for fiat currencies to eventually decline in value. Brandt’s analysis draws on historical similarities and technical patterns to highlight Bitcoin’s growing importance in the global financial landscape.
According to Brandt, the argument for Bitcoin involves the eventual destruction of fiat currency units. To illustrate his point, Brandt shared a chart comparing Bitcoin (BTC) to total US money holdings (M1), and the ratio remains below its December 2017 high.
Set side by side, Brandt highlights the striking similarities between this chart and the (DJIA) chart from the Great Stagflation of the 1970s.
The 1970s were a period of high inflation and stagnant economic growth, known as stagflation. The DJIA has shown a particular pattern during this time, which Brandt says is now reflected in Bitcoin’s performance compared to the growing supply of US dollars. This pattern, known as an inverted head and shoulders pattern, is often interpreted as a bullish signal, suggesting further upward movement in Bitcoin’s value.
The inverted head and shoulders pattern is a technical analysis chart pattern that indicates a reversal in a downtrend. It consists of three parts: the lowest point (head) surrounded by two higher, lower points (shoulders). When this pattern forms, it signals the potential for significant upward price movement once the price breaks above the resistance level formed by the shoulders.
In the context of Bitcoin, this pattern suggests an impending shift in dynamics that could take the cryptocurrency to up-to-date heights, much like the Dow finally emerged from a period of stagflation.
Brandt’s point of view is not without skepticism, as he states that some market observers may disagree with the definition of the pattern as an “inverted head and shoulders continuation.” He therefore presents an argument using many references to support his claims.
The identified inverted head and shoulders pattern, if verified, could be technical confirmation of a much larger fundamental change – one that could redefine the very concept of money in the coming years.
At the time of writing, BTC is trading at $67,722.
