Bitcoin On Brink Of Massive Breakout Like Gold In 2008: Hedge Fund CEO
August 20 2024 - 4:00PM
NEWSBTC
In the latest edition of the Capriole Investments newsletter dated
August 20, 2024, Charles Edwards, founder and CEO, draws striking
parallels between the current market behavior of Bitcoin and the
historical performance of Gold, particularly during its 2008 rally.
Bitcoin Mirrors 2008 Gold Rush Edwards points out that Bitcoin has
been consolidating around $60K, echoing the pattern Gold followed
before its significant rally. “Bitcoin is under pressure, mirroring
the longest period of consolidation at any ATH in its history,”
Edwards notes, suggesting that this could be a precursor to a
significant breakout. According to him, this pattern closely
mirrors that of Gold in the late 2000s, when it consolidated for
nine months around its 1980 ATH before launching a significant
two-year rally in 2008. Edwards elaborates on the technical
similarities, noting, “Gold’s first significant consolidation
post-ETF launch preceded a rally that saw its value climb by 180%
in just over two years. Today, Bitcoin exhibits similar market
behavior in the aftermath of its own ETF launches and
consolidations.” Related Reading: Over 80% of Short-Term Bitcoin
Holders Underwater — What This Means For BTC Edwards notes that
during Gold’s consolidation phase in 2008, the asset underwent a
-33% drawdown, eventually marking what many investors consider a
generational bottom. Bitcoin’s recent dip to $48,000—a -33%
crash—strikingly aligns with this aspect of Gold’s historical price
action. “The July 2024 Bitcoin dip saw a -28% drop to $53K, and the
more recent August 2024 dip mirrored Gold’s final plunge, falling a
mere half a percent short,” Edwards states, highlighting the
precision of these parallels. Based on these historical parallels,
Edwards predicts that Bitcoin price could be “ripping straight to
$140K with no dips by around May 2025.” While he acknowledges that
a single datapoint does not mean that gold’s history has to repeat
for Bitcoin, he believes that it is “the most comparable asset at
the most comparable time in its history.” Related Reading: Analyst
Forecasts Bitcoin Bull Run Top With Historically Proven Indicator
Despite the bullish signal from the historical and technical
analysis, Edwards remains only cautiously optimistic. He
acknowledges ongoing discrepancies in fundamental data signals and
suggests a conservative stance until further bullish confirmations
can be observed. “We are still awaiting the Monthly close; the
conservative position would be to await further bullish
confirmations (and potentially Q4) to fully clear what is typically
the most bearish period of each calendar year for Bitcoin and risk
assets,” Edwards notes. If Bitcoin can close above the monthly
support, Edwards sees a “very attractive technical setup.” He
concludes, “I believe this period of market consolidation is coming
to a close as we exit summer, and I maintain strong conviction that
the next 12 months will be the best time out of the last 3 years to
be allocated to this asset class.” At press time, BTC traded at
$60,712. Featured image created with DALL.E, chart from
TradingView.com
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