Bitcoin is Priced Lower Than Gold, Indicating Potential Price Increase: Analyst

According to Samson Mow, CEO of technology company Bitcoin Jan3, Bitcoin is undervalued compared to gold and the global money supply, which could signal a price reversal. “Bitcoin is currently about 24%-66% below the trend of gold’s market capitalization or global money supply, while gold is being overvalued,” Mow said in a Saturday post on X. Gold futures for April delivery closed Friday at $5,247.90; PAX Gold USD is trading at $5,404.14 at the time of writing. Mow also cited Bitcoin’s Z-score, an index that tracks how close the BTC price is to the historical average. A Z-score of 0 indicates that the price is in line with the average, while a Z-score above 0 indicates that the price is moving above the average.

A Z score below 0 indicates that the price is trading below the average. When only the Z score of the Bitcoin/Gold ratio dropped below -2, Bitcoin experienced “significant” price increases, Mow said. The Z score of the BTC/gold ratio is currently around -1.24. Data from TradingView shows that the index fell below -3 in November 2022, amid the collapse of crypto exchange FTX and the rise of the price of BTC by more than 150% over the next 12 months.

Previously, a similar pattern took place during the Covid crash in March 2020, when the index dropped below -2 and Bitcoin bottomed out at around $3,717. Bitcoin skyrocketed by more than 300% over the next 12 months, and by November 2021, BTC had reached its all-time high at the time, around $69,000. Will Bitcoin plummet to $50,000? Mow’s analysis is in contrast to the views of other analysts, who forecast that the cryptocurrency market will face even more difficulties and that the price of Bitcoin will continue to decline due to investor instability and geopolitical tensions. According to crypto market analysts, the BTC price may be heading towards the $50,000 level, and they think that this price movement may be reflecting the bear market in 2022. Bitcoin fell more than 50% from peak to bottom, to a low of $60,000, before recovering slightly to its current level of nearly $66,400 following developments in the Middle East over the weekend.