Today's Bitcoin looks a lot like the crazy 1970s !
Updated
BTCUSDT
GOLDHello everyone 😃
Before we start to discuss, I would be glad if you share your opinion on this post's comment section and hit the like button if you enjoyed it !
📊 Have to mention that All of the levels and prices are calculated on classical linear charts.
- This article is a combination of my own vision and Kim Iskyan's article.
Hope you enjoy the content 😊
In 1970s, A lot of investors dismiss gold as jewelry. And they dismiss “gold bugs” investors who believe gold is the answer to all financial ills and is the key to surviving the impending financial apocalypse (in any era or decade) as slightly crazy.
But gold bugs haven’t always been wrong. In 1971 gold traded at US$35.
By the end of that decade, gold touched US$850. That’s a 2,300 percent gain in the 1970s.
Meanwhile, for stock investors in the west, the ‘70s were pretty much a lost decade with lots of volatility, but flat returns.
The world didn’t end in the 1970s, but double-digit inflation, oil price shocks, a weak dollar, and political instability made investors fearful and nervous.
With rising fear and uncertainly investors bought more gold, since it is a tangible store of wealth. As the ‘70s drew to a close, people stampeded to own it.
It happened once – and it could happen again !
The current #BTC's rally bears some remarkable resemblances to what happened to gold prices in the ‘70s.
For example:
📌 Crisis of Confidence
While the specific economic problems of the ‘70s in the west – inflation, recession, oil crisis were different than today, there are broad parallels between now and then.
In 1979, then U.S. President Jimmy Carter talked about a “crisis of confidence” in government and the future.
This erosion of confidence extended to Carter himself he lost the 1980 election to Ronald Reagan.
And what was Reagan’s campaign slogan in 1980? “Make America Great Again” the same slogan that Donald Trump has borrowed as he taps into populist anxiety eerily similar to that of the ‘70s.
Today’s crisis of confidence is a global phenomenon, extending from Washington to London to Beijing.
The ‘70s crisis of confidence reached a boiling point in 1979 – when, not coincidentally, gold surged. We could be on a similar trajectory today and now it's the time for #BTC to surge and take everything to ground again !
📌 Broken Central Bank Policy
When the U.S. abandoned the gold standard in August 1971, the U.S. Federal Reserve took on an expanded role managing the U.S. economy.
The Fed at the time adhered to the Keynesian school of economic thought.
This theory, named after British economist John Maynard Keynes, states that growth in the money supply will increase employment and economic growth.
So when unemployment in the U.S. accelerated in the early ‘70s, the Fed and other global central banks responded by printing more money.
But it didn’t work.
Instead, the world experienced “stagflation,” a combination of stagnant economic growth and rising inflation.
Then to help control inflation, central banks raised interest rates.
In 1971, the U.S. Fed funds rate was under 4 percent. By the end of the decade it was over 13 percent.
Today, we are eleven years into another central bank experiment that doesn’t seem to be working.
The world is again facing stagnant economic growth, but inflation is not the problem deflation, or falling prices, is a real possibility.
To combat this, global bankers had aggressively expanded the money supply and lowered interest rates.
- The higher sentences ( Broken Central Bank Policy ) has been written by Kim Iskyan, Who believes that GOLD have the similar movement with 70's decade !
But I got the different perspective out of it, It's not the hype time of #GOLD now, It's gone for 30 years, Now the hype one is #BTC, Which is people now believing into it.
Which is hype just like when #GOLD was discovered by investors and people to invest into it...
📌 Strikingly similar price patterns
The rise and fall of market prices often display patterns that repeat over the months. And we could be seeing that happen with Bitcoin prices.
In the 1970s, gold rose from a low of US$35 per ounce in 1971, to a peak of US$180 in late 1974. From there gold experienced a correction, falling nearly 40 percent to US$110 in August 1976.
But from that low, gold mounted an historic rally. By June 1978 it was back to its previous high.
Then gold went nearly parabolic, with a frenzied surge to US$850 in January 1980.
- It’s fascinating to see that the current #BTC's bull market
shares a very similar pattern – to this point – of the ‘70s gold market.
- 1970s: US$35 in 1971 to US$195 in 1974 (460% gain)
- Now: $11500 in 2020 to $64000 in 2021 (460% gain)
- 1970s: Correction Dec74 - Aug76, US$197 to US$110 (48% loss)
- Now: Correction Apr21 - Jul21, $64000 to $30000 (53% loss)
If history repeats itself, a huge jump in Bitcoin prices is coming.
In the current bull market, Bitcoin reached an all-time high in April of 20211 of $65000, but fell to a low of $29200 in July 2021.
Is it possible that the July 2021 low marked the end of the correction phase of another long-term gold bull market?
Will $113000 or $238000 Bitcoin become a reality over the next year?
It’s possible. But to soar like in the late 70s, Bitcoin will have to move into the “mania phase.” This is where gold investors lose contact with economic reality, and chase prices ever higher in a feedback loop of soaring prices, “new era” thinking and greed.
Think Tulip Mania in the 17th Century, internet stocks in 2000, and Chinese stocks in 2015.
In 1979, a second oil spike after years of global energy inflation, in conjunction with global political instability, sent gold investors into a final buying panic which ultimately led to the January 1980 peak in gold prices.
A similar type of economic shock could be the trigger for another massive spike in Bitcoin prices.
Also we had the similar rally on Bitcoin's 2017 bull-run !
So is it probable that gold will repeat the historic gains of the 1970s? No.
Is it a legitimate possibility? Yes.
Conditions are favourable for Bitcoin… and getting more favourable by the day.
📚 If I want to predict the movement, I would use the FIB retracement's indicator as the primary tool; Have to mention that we use this tool to locate the local on our last #BTC's analyze and it just works out greatly.
I would say that Before any leg up, We might retest the 54K's support level as the fractal is suggesting and it can be a good level to retest as FIB's 38.2% is located there.
But before any confirmation, #BTC needs to lose the $59500's support !
- For the next bull-run, I would suggest $85000's level as the first resistance line cause gold FIB's level as located near to it and can hold the pair for the couple of days and set my 2nd stop at $113000 as important price action level is standing there and my final target is located at $138205.0 Which is suggested by the #GOLD 70's fractal.
📑 Conclusion :
Current Bitcoin's movement is very similar to 70's gold's fractal, If we change the scales into the much little ones, We can match rhythm between then.
If history repeats itself, a huge jump in Bitcoin prices is coming.
The targets for the continuation of new bull cycle will be 85K - 113K - 138K.
The current bitcoin rally bears some remarkable resemblances to what happened to gold prices in the ‘70s.
Hope you enjoyed the content I created, You can support us with your likes and comments !
Attention: this isn't financial advice we are just trying to help people on their own vision.
Have a good day!
Helical_Trades
Note
Have to thanks much more to EuroMotif with his great contents based on FIB levels ! I just found the golden levels from his ideas ;D
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