According to U.Today, Peter Brandt, a seasoned trader recognized for his sharp market insights, has recently presented a persuasive case for Bitcoin, emphasizing the potential downfall of fiat currencies. Brandt's analysis uses historical comparisons and technical patterns to underscore Bitcoin's increasing importance in the global financial arena. Brandt argues that Bitcoin's significance is tied to the eventual collapse of fiat currency units. He shared a chart comparing Bitcoin (BTC) to the total U.S. money stock (M1), a ratio he claims is still below the high of December 2017.
Brandt draws attention to the striking similarities between this chart and the Dow Jones Industrial Average (DJIA) during the Great Stagflation of the 1970s. The 1970s were characterized by high inflation and stagnant economic growth, a condition known as stagflation. Brandt believes that the pattern exhibited by the DJIA during this period is now reflected in Bitcoin's performance against the growing supply of U.S. dollars. This pattern, known as an inverted head and shoulders, is often seen as a bullish signal, indicating further upward movement in Bitcoin's value.
The inverted head and shoulders pattern is a technical analysis chart formation that signals a reversal of a downward trend. It consists of three parts: a low point (head) flanked by two higher low points (shoulders). When this pattern forms, it signals the potential for a significant upward price movement once the price breaks above the resistance level formed by the shoulders. In the context of Bitcoin, this pattern suggests an impending momentum shift that could drive the cryptocurrency to new heights, much like the Dow eventually emerged from the stagflation period.
Brandt's perspective is not without skepticism, as he acknowledges that some market observers may dispute the definition of the pattern as a 'continuation inverted head and shoulders.' Therefore, he presents an argument with numerous references to support his claims. If the identified inverted head and shoulders pattern is confirmed, it could be the technical affirmation of a much larger fundamental shift — one that could redefine the very concept of money in the coming years. At the time of writing, BTC was trading at $67,722.