Bitcoin is undervalued relative to gold; is this a rebound signal or market illusion?

Recently, Jan3 CEO Samson Mow posted on X stating that, whether compared to gold market capitalization or global money supply, Bitcoin's relative value is in a state of relative undervaluation, which could indicate an upcoming price rebound.

He said, “The trend of Bitcoin relative to gold market cap or global money supply is approximately 24%-66% below, while gold is in an overbought state.”

Mow also referenced Bitcoin’s Z-score indicator to measure the deviation of the current price from its historical average.

Mow specifically pointed out that when the Z-score of Bitcoin to gold ratio drops below -2, Bitcoin often experiences a "significant" price rebound.

As of press time, the Z-score of this indicator is about -1.24, although it has not yet reached the -2 threshold, it is already in a relatively low position.

According to market data from TradingView, historical patterns also support this observation. During the FTX cryptocurrency exchange collapse in November 2022, this indicator fell below -3, and Bitcoin’s price rebounded over 150% in the following 12 months.

Similarly, during the earlier COVID-19 pandemic market crash, a similar trend appeared. The indicator also dropped below -2 in March 2020, with Bitcoin dipping to a low of about $3,717.

In the subsequent 12 months, Bitcoin surged over 300%, reaching a historical peak of around $69,000 in November 2021.

However, some analysts with different viewpoints believe the market may continue to decline. The reason is that investor confidence is currently low, coupled with geopolitical tensions, which could push Bitcoin down to $50,000.

From market data, Bitcoin has sharply fallen over 50% from its recent high, briefly dropping to a low of $60,000. After recent developments in the Middle East last weekend, Bitcoin has slightly rebounded to around $66,400.

Overall, there are differing opinions on Bitcoin’s current valuation. Some believe Bitcoin is undervalued relative to gold and a rebound is imminent;

Others warn that macro risks remain, and it could fall to $50,000. Whether Bitcoin will bottom out and rebound or continue to decline remains to be seen, as the market awaits clearer signals.

#比特币 # Analyst opinion