Bitcoin Never Tops Unless This Happens

This video explores how gold and copper, rather than just the US dollar, can serve as crucial indicators for Bitcoin’s market cycles and the broader economic outlook.

Here’s a summary and highlights:

• Bitcoin’s Relationship with Gold
  • The video suggests that tracking Bitcoin’s performance against gold provides a cleaner signal, reflecting Bitcoin’s rise as a monetary asset.
  • Historically, Bitcoin has peaked in bull cycles when the Bitcoin to gold ratio enters “price discovery,” meaning it breaks above previous highs.
  • Past peaks: In December 2017, Bitcoin peaked at around $20,000, reaching 15.5 ounces of gold per Bitcoin. In November 2021, it hit $69,000, with the BTC gold ratio at 37.7 ounces.
  • A realistic target for the current cycle, based on diminishing returns, could be 50 to 60 ounces of gold per Bitcoin. Assuming gold at $3,400 per ounce, this would place Bitcoin’s price around $204,000.
  • The BTC gold power law model projects a similar six-figure target, with the 3.618 Fibonacci extension at $200,000.
  • Bitcoin’s market cap is projected to eventually surpass the value of all above-ground gold, potentially by January 2033, according to the BTC gold power law model.
  • Bitcoin peaks tend to occur when the correlation coefficient between Bitcoin and gold drops near zero or goes negative, indicating investors are moving from safe havens to riskier assets.
• The Copper to Gold Ratio as an Economic Indicator
  • The copper to gold ratio is a leading indicator of economic health because copper is widely used in industries like construction and electronics, making it a proxy for economic growth.
  • Gold, conversely, tends to spike when investors are nervous.
  • A rising copper to gold ratio suggests stronger economic growth, while a falling ratio signals fear and economic contraction.
  • The recent reversal of a long-term downtrend in the copper-gold ratio suggests a potential major economic boom, which is favorable for risk assets like Bitcoin.
• Key Takeaways for Traders and Investors
  • The video emphasizes the importance of observing a breakout in the BTC gold ratio, signaling investors are becoming aggressive on risk.
  • Continued climbing of copper dominance indicates a strong economic boom, which drives demand and benefits the crypto market.