The chart set-up for bitcoin is similar to 2013, before the last great melt-up. From Moneyweb.
Cryptocurrencies are coming to the fore, just like various forms of private money did during the Great Depression. Image: Chris Ratcliffe, Bloomberg
Cape Town-based gold and crypto analyst Hubert Moolman sees something momentous in the gold and crypto charts.
The gold, silver and cryptocurrencies charts are showing signs of going parabolic, he says; the US dollar is close to confirming a massive breakdown. “The gold price broke $2 000/oz in recent months, retraced, and is now nudging up against a resistance level of $1 902/oz. Should it break this, it is likely to surge higher.”
Read: Is it possible to make risk-free profits in crypto?
JPMorgan’s quantitative analyst Nick Panigirtzoglou, writing in his Flows and Liquidity, recently noted that while older generations were buying gold as a risk asset, younger investors are choosing cryptos such as bitcoin. Grayscale Bitcoin Trust is now the fifth largest holding in Milletmeals’ retirement accounts.
This, and the growing institutional support, is bullish extremely bullish for bitcoin.
Panigirtzoglou writes that “the potential long-term upside for bitcoin is considerable as it competes more intensely with gold as an ‘alternative’ currency we believe, given that millennials would become over time a more important component of investors’ universe”.
Read:We’re a long, long way from running out of gold
Gold extends drop to one-month low
Gold price bears striking similarities to break-out in the 1970s
Source: Hubert Moolman
Turning to the charts, Moolman notes a similarity between the late 1970s and the current gold chart (marked ABC in the above chart). For this similarity to continue, gold will have to break the $1 920/oz level.
“We’ve already seen the breakout, now the price has just been consolidating around that level. It is very close to blasting higher,” says Moolman.
“From a cycle analysis point of view, we are right at a point where a sustained multi-year gold rally is possible.”
The set-up for bitcoin is very similar to the end of 2013.
Bitcoin poised for breakout?
Source: Hubert Moolman
Moolman says the set-up for silver is the same. Should it break current levels, it will trend far higher.
We are at the end of the fiat debt-based monetary system, adds Moolman.
It is becoming clear that the system is in collapse due to the enormous debt load.
“Hate them or love them, many people are running to bitcoin and other cryptocurrencies, especially the younger generation. The very fact that bitcoin and cryptocurrencies exist, and are coming to the fore, just like various forms of private money did during the Great Depression, is a major sign of the times.”
Bitcoin has an interesting relationship with the US dollar index. Below is a comparison between bitcoin (bottom chart) and the US dollar index (top chart).
Comparison between US dollar index and bitcoin
Source: Hubert Moolman
Bitcoin tends to make key breakouts around the same time the US dollar index tends to make a key breakdown (and vice versa). This was the case before the bitcoin blow-off rally in 2013, and recently.
“It is interesting that the 2013 US dollar index breakdown and the current breakdown also coincides with the fractals marked (1 to 5) on the bitcoin chart. This is a perfect set-up for a massive bitcoin rally,” says Moolman.
