Henrik Zeberg, a macroeconomist, predicts a "monster" surge in #bitcoin (BTC) and other risk assets while the trend is still in its infancy. Zeberg uses the BTC/SPX Ratio, an indicator that plots Bitcoin's value against that of the S&P 500 index (SPX), to make his forecasts.
The Bitcoin/S&P 500 Ratio Predicts a Huge Price Swing
Zeberg is still optimistic about BTC despite the market's recent downturn and worries about the crypto market's long-term viability. Using the BTC/SPX ratio, the analyst concludes that the Bitcoin rally is "just starting." Price action suggests that the current September downtrend may present buying chances.
An indication of Bitcoin and stock market performance is the BTC/SPX Ratio. The ratio is calculated by dividing the current values of Bitcoin and the S&P 500 index (SPX). The current uptrend suggests that Bitcoin is performing better than the stock market. On the other hand, a ratio that is falling indicates that Bitcoin's performance is worsening. If that's the case, investing in the stock market may yield higher profits than holding onto bitcoin.
Based on the graph from October 3, Zeberg predicted a "bull" signal in February 2023, just before Bitcoin's price surged significantly. Bitcoin's price has risen to almost $32,000 by July 2023. Despite a pullback since then, Bitcoin is currently trading at above $25,200, maintaining the rise that began in February.
The S&P 500 rose by 41% during the same time period, whereas Bitcoin increased by a factor of 6 between April 2019 and May 2021 when a comparable bull signal was issued. Zeberg's prediction, based on the BTC/SPX Ratio, implies that Bitcoin and, by extension, other risk assets, can achieve significant growth in the next months.
Will Bitcoin's Price Rally Take It to $200,000?
No one knows for sure if this will be published or not. The BTC/SPX ratio is a lagging indicator that misses market tops and troughs.
For instance, the latest bear warning in May 2021 occurred months before the peak and subsequent decline of Bitcoin in November 2021. Since the bull signal was just registered in early 2023 February, it is still unknown if the currency will see another leg down before prices climb or if bears will press on, sending the coin down to 2022 lows.
It is hard to predict how far BTC would grow at present prices if buyers gain control and the BTC/SPX Ratio indicator is true. If the recent bull run is any indication, BTC might see a sixfold increase. If that's the case, the Bitcoin price might surge and break above $200,000 in this bull cycle.