Bitcoin's valuation relative to gold has fallen to an all-time low, a sign that has historically been near the bottom of major markets.
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remarkable pattern
This is one of the key observations of crypto analyst Michael Van de Poppe, who believes Bitcoin is on the way to new highs before the end of the year.
Van de Poppe points to the relationship between Bitcoin and gold as a sign of this. When gold rises violently, Bitcoin often lags behind. But when gold peaks, Bitcoin tends to catch up, and then gradually catch up. That rotation may already have begun, he argues.
His broader case is based on one or more indicators. The Sharpe ratio, a measure of return to risk, is currently at a level that reflects the lower bound of previous bear markets of 2015, 2018, and 2022.
Each of these periods was followed by significant price recoveries. Based on that pattern, Van de Poppe believes Bitcoin is currently undervalued and offers a strong risk-reward setup for long-term investors.
He said a short-term decline was still possible. But in his view, the overall structure of the market points higher.
Key price levels to watch
Bitcoin recently hit a 12-week high before falling back. It is currently trying to maintain a level above $77,000. According to Van de Poppe, $79,000 is a key resistance level.
A clean break above this would open the door for price action between $86,000 and $95,000. From there, your next six-month goal is $110,000.
On the downside, $73,500 is a noteworthy level. If this support holds, the uptrend will be sustained. If it breaks down, there could be a deeper retest before a new rally.
According to the data, Bitcoin fell by nearly $60,000 in February before rebounding sharply. The move caught many traders off guard. Reports suggest that such a rebound in bearish sentiment is not unusual in past cycles.
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big year-end goals
Among them, long-distance calls are attracting attention. Van de Poppe expects Bitcoin to reach between $150,000 and $160,000 by the end of 2026, which would mark new all-time high territory.
He bases his predictions on historical cyclical movements, which suggest a 30% to 50% rally within three months of a confirmed low.
Whether that bottom is already in remains an open question. But for Van de Poppe, the signals are stacking up in one direction.
Featured image from Unsplash, chart from TradingView
