U.Today – Peter Brandt, a veteran trader known for his keen market insights, has recently made a compelling argument for it, underscoring the potential for an eventual crash in fiat currencies. Brandt's analysis draws on historical parallels and technical patterns to highlight the growing importance of Bitcoin in the global financial landscape.
According to Brandt, the argument for Bitcoin relates to the eventual destruction of fiat currency units. To illustrate his point, Brandt shared a chart comparing Bitcoin (BTC) to the total US monetary stock (M1), a ratio he says remains below the December 2017 high.
Placing them side by side, Brandt highlights striking similarities between this chart and the (DJIA) during the Great Stagflation of the 1970s.
The 1970s were a period marked by high inflation and stagnant economic growth, a phenomenon known as stagflation. The DJIA during this time exhibited a particular pattern that Brandt believes is now reflected in Bitcoin's performance against the increasing supply of US dollars. This pattern, known as an inverted head and shoulders, is often interpreted as a bullish signal, suggesting further upward movement in the value of Bitcoin.
The inverted head and shoulders pattern is a technical analysis chart formation that indicates a reversal of a downtrend. It consists of three parts: a low point (head) flanked by two higher low points (shoulders). When this pattern forms, it indicates the possibility of a significant upward price movement once the price breaks through the resistance level formed by the shoulders.
In the context of Bitcoin, this pattern suggests an imminent momentum shift that could propel the cryptocurrency to new heights, much like how the Dow finally emerged from the period of stagflation.
Brandt's view is not without skepticism, as he states that some market observers may not agree with the definition of the pattern as an “inverted head and shoulders continuation.” Thus, he presents an argument using many references to support his claims.
The identified inverted head and shoulders pattern, if validated, could be technical confirmation of a much larger fundamental shift, one that could redefine the very concept of money for years to come.
At the time of writing, BTC was trading at $67,722.
This article was originally published on U.Today.
