Bitcoin (BTC) is relatively undervalued compared to gold and global money supply, which could indicate price volatility, according to Samson Mou, CEO of Bitcoin Technology Company, on January 3rd this year.
“Bitcoin is about 24-66% below its trend relative to the market value of gold or global money supply, while gold is overextended,” Mou said in a post on X on Saturday.
Gold futures for April delivery closed at $5,247.90 on Friday; Tokenized gold PAX Gold USD was trading at $5,404.14 at the time of writing.
Mou also referenced Bitcoin’s Z-score, a metric that tracks how close BTC’s 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 of 0 indicates that the price is rising above the average.
A score of 0 indicates that the price is below average. As the Z-score on the bitcoin-to-gold ratio falls below -2, Bitcoin has hit a “major” price rally, Mou said. The Z-score of the BTC-to-gold ratio is about -1.24 at the time of writing.
Data from TradingView shows that the metric in November 2022 on the back of the collapse of the crypto exchange FTX and the price of BTC rose more than 150% over the next 12 months.
Previously, a similar pattern occurred during the Covid crash in March 2020, when the metric dropped below -2 and Bitcoin reached a low of around $3,717. Bitcoin increased by more than 300% in the next 12 months, and by November 2021, BTC reached an all-time high of around $69,000.
related to: Bitcoin Traders Watch for Iran Reactions as Oil Triggers US Inflation Forecast of 5%
Bitcoin Will Fall to $50,000?
Mow’s analysis contradicts other analysts who predict more pain in the crypto market and a further decline in the price of Bitcoin due to investor uncertainty and geopolitical tensions.
According to crypto market analysts, the price of BTC could go as high as $50,000, saying that the price action could reflect the bear market of 2022.
Bitcoin fell more than 50% from a peak to a low of $60,000, before a limited recovery to the current level near $66,400 after this week’s developments in the Middle East.
Magazine: Bitcoin to see ‘a big push’ to $150K, ETH pressure increases: Trade Secrets
