According to Samson Mow, CEO of the Bitcoin technology company, Bitcoin (BTC) is relatively undervalued compared to gold and the global money supply, which could signal a price reversal.
“Bitcoin is approximately 24-66% below its trend relative to gold market cap or global money supply while gold is overexposed” – Mow he said in Saturday’s post on X.
Gold futures for April delivery closed at $5,247.90 on Friday; PAX Gold USD tokenized gold was trading at $5,404.14 at the time of writing.
Mow also cited Bitcoin’s Z-score, a metric that measures how close BTC’s price is to its historical average. A Z-score of 0 means that the price is in line with the average, while a Z-score above 0 indicates that the price is moving above the average level.
A score below 0 indicates that the price is below average. When the Z-score of the Bitcoin-to-gold ratio falls below -2, Bitcoin will experience “severe” price increases, Mow said. At the time of writing, the BTC to gold Z-score is around -1.24.
Data from TradingView shows that the indicator dropped below -3 in November 2022, due to the collapse of cryptocurrency exchange FTX, and the price of BTC increased by over 150% over the next 12 months.
Previously, a similar pattern occurred during the Covid crash in March 2020, when the indicator fell below -2 and Bitcoin bottomed around $3,717. Bitcoin’s value increased by over 300% in the following 12 months, and by November 2021, BTC had reached a then-high of approximately $69,000.
Related: Bitcoin traders watch Iran’s reaction as oil triggers US inflation forecast of 5%.
Bitcoin Will Fall to $50,000?
Mow’s analysis contradicts the views of other analysts who predict more problems for the cryptocurrency market and a further decline in Bitcoin prices due to investor uncertainty and geopolitical tensions.
BTC’s price could be heading towards $50,000, according to cryptocurrency analysts who say the price action could reflect a bear market in 2022.
Bitcoin fell more than 50% from peak to trough to a low of $60,000, before seeing a circumscribed recovery to a current level of almost $66,400 following events in the Middle East this weekend.
Warehouse: Bitcoin sees “one more big push” to 150,000. dollars, pressure on ETH increases: trade secrets
