The Bitcoin price could potentially be following a gold fractal during the 1970s, the last time inflation in the United States got out of hand.
What followed was a rally of more than 700% in the precious metal. Will the same happen in digital gold?
Bitcoin follows the gold price fractal of the 1970s
Over the past week, both Bitcoin and gold have rallied in the wake of 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 top cryptocurrency by market cap rising, the price of BTC in banks is part of the most shocking and impressive price charts you could imagine.
That shock and awe could continue, if a BTC fractal follows on from the gold of the 1970s and continues to develop. In the 1970s, the United States rate of inflation it reached over 10% and double digits were not uncommon in the early 1980s.
During the worst, gold rose more than 750%, from $100 to $850 per troy ounce of the precious metal. Now that same fractal price is potentially back in Bitcoin, and so is skyrocketing 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, referencing gold from the 1970s.
Inflation had first reached double digits in 1974, just three years after US President Richard Nixon announced that the United States would no longer be convertible from dollars to gold at a fixed price of $35 per ounce. .
Gold went parabolic, first experiencing a retracement in 1974 when inflation overheated. After a two-year correction, gold spent the next few years rallying more than 750%.
The Bitcoin price also corrected strongly when inflation first kicked in, but after two years it is beginning to show resistance. In the future, it could turn out to be the digital equivalent of 1970s gold, helping investors weather inflation or a banking crisis.
In the previous price fractal, gold completed a wave 5 after an extended flat correction, according to the Elliott wave principle. In the commodity markets, wave 5 tends to extend. With BTC classified by the SEC and CFTC as a commodity, could the crypto asset work in a similar way?
If BTCUSD were to follow the same path with a 750% return from the recent lows, it would ultimately drive Bitcoin past $132,000 per coin. Could this be what’s coming 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 commodity-like market behavior? Here is a comparison with #Gold in the 1970s. $BTC against $XAU pic.twitter.com/I6ifTOtz8V
— Tony “The Bull” (@tonythebullBTC) March 20, 2023
