Bitcoin (BTC) is relatively undervalued relative to gold and the global money supply, which could signal a price reversal, according to Samson Mow, CEO of tech company Bitcoin Jan3.
“Bitcoin is approximately 24-66% below trend relative to the gold market cap or global money supply, while gold is overexploited,” Mow said in a Saturday post on X.
Gold futures for April delivery closed Friday at $5,247.90; Tokenized gold PAX Gold USD was trading at the time of writing at $5,404.14.
Mow also cited Bitcoin’s Z-score, a metric that indicates how close the BTC price is to its historical average. A Z-score of 0 indicates that the price is in line with the average, while a Z-score greater than 0 indicates that the price is moving above average levels.
A score below 0 indicates that the price is trading below average. When the Bitcoin/gold ratio Z-score falls below -2, Bitcoin has seen “major” price increases, Mow said. The Z-score of the BTC/gold ratio is around -1.24 at the time of writing.
Data from TradingView shows that the metric fell below -3 in November 2022, in the middle of the collapse of crypto exchange FTX and the price of BTC increased by over 150% in the next 12 months.
Earlier, a similar pattern occurred during the Covid crash in March 2020, when the metric fell below -2 and Bitcoin reached a low of around $3,717. Bitcoin surged over 300% over the next 12 months, and in November 2021, BTC reached what was then the all-time high of around $69,000.
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Bitcoin will collapse to $50,000?
Mow’s analysis runs counter to that of other analysts, who predict more difficulty for the crypto market and a further drop in Bitcoin prices due to investor uncertainty and geopolitical tensions.
The price of BTC can be heading towards $50,000according to crypto market analysts, who say the price action could reflect the 2022 bear market.
Bitcoin fell more than 50% from peak to trough, at a minimum of $60,000before staging a limited recovery to current levels near $66,400 following this weekend’s developments in the Middle East.
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