Gold Is Overvalued, Rotation into Bitcoin Is Due: Will 80% BTC Crash Theory Hold?

Market analyst Michael van de Poppe said Bitcoin is reaching a rare valuation level when compared with gold. According to his analysis, the relative strength index (RSI) of Bitcoin against gold has dropped below 30 for only the fourth time in Bitcoin’s history.

The previous three times this event occurred near major Bitcoin BTC $86 359 24h volatility: 3.9% Market cap: $1.72 T Vol. 24h: $51.49 B market bottoms in 2015, 2018, and 2022. In each case, Bitcoin later began a long recovery phase. Van de Poppe said this does not guarantee a repeat, but it suggests a strong imbalance between the two assets.

He believes gold is currently overvalued relative to Bitcoin and that a rotation from gold into Bitcoin may be approaching. He also noted that the distance between Bitcoin and its 20-week moving average is unusually large, a condition that has usually resulted in recovery rallies.

Bitcoin Price Correction and Why It Happened

Poppe also discussed the recent price action in Bitcoin after a rejection at $90,000. After failing to hold support, Bitcoin moved lower alongside declines in gold and US equities such as the Nasdaq.

According to his analysis, a move back above $88,000 could boost optimistic sentiment among traders. If weakness continues, he is watching pullback levels below $83,800 and potentially below $80,500.

He admitted that trading is risky because of the current macro calendar, which includes US unemployment data, inflation data, and a widely expected interest rate hike from the Bank of Japan. 

Bitcoin has historically reacted negatively after past rate hikes from Japan, van de Poppe cautioned investors.

On the other hand, Glassnode said in its BTC Pulse report that the Bitcoin 14-day RSI has moved back toward neutral levels, while spot market conditions have worsened. Spot cumulative volume delta turned negative as well. Trading volume also fell toward a lower historical range while futures open interest declined slightly.

Bitcoin RSI, Spot CVD, and Spot Volume | Source: Glassnode

Glassnode added that long positions are still present but may be vulnerable if prices fall further.

80% Crash Risk

Veteran trader Peter Brandt warned that Bitcoin has broken its parabolic trendline. In past cycles, similar situations saw BTC prices drop as much as 80% from the peak.

Bitcoin is currently about 20% below its all-time high. If historical patterns were to repeat, an 80% decline would mean a drop to $25,000. Brandt noted that such moves usually occur during periods of tighter global financial conditions.

However, the current cycle differs from earlier ones. Data shows that Bitcoin ownership has become more institutional and long-term. Corporate Bitcoin holdings have grown from around 197,000 BTC in early 2023 to more than 1.08 million BTC today, an increase of roughly 448%.

According to Bitcoin researcher Axel Adler Jr., “Bitcoin is currently in a correction phase after three years of growth.” With BTC currently trading above $86,000, long-term investments from institutions may limit an 80% Bitcoin price crash.

Bitcoin Hyper Presale Gains Traction, Secures $29.5M

As Bitcoin price movement remains uncertain, a new project, Bitcoin Hyper (HYPER) has entered the market. The project has already attracted strong attention during its presale stage, securing $29.52 million through its presale.

Bitcoin Hyper aims to tackle common limitations found on the Bitcoin network, including slower transaction processing, rising fees, and the absence of native smart contract support. The platform introduces a faster Layer 2 framework that handles transactions through an upgraded virtual machine.

However, the final settlement records are on the Bitcoin main chain. This structure maintains Bitcoin’s settlement security while allowing quicker and more efficient activity.

The HYPER token plays a key role in the Bitcoin Hyper network. It is used for gas fees, staking, and access to selected platform functions. These uses connect the token closely to daily network operations. 

Currently, the presale price stands at $0.013435. According to the project’s official website, a price increase could occur within the next few hours. Interested investors can learn how to buy Bitcoin Hyper before this price surge event.

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