A senior analyst at U.S.-based financial giant Citibank has penned a report drawing on similarities between the 1970s gold market and bitcoin.
The whole of bitcoin’s existence has been characterized by major price swings, “exactly the kind of thing that sustains a long-term trend,” said Thomas Fitzpatrick, global head of the company’s CitiFXTechnicals market insight product, in his report solely intended for the bank’s institutional clients.
The report was first leaked to the cryptocurrency community by Twitter user “ClassicMacro” in a tweet on Saturday, noting Fitzpatrick is “a big fan of moon targets.”
Fitzpatrick pointed to bitcoin’s weekly chart and used technical analysis (TA) of prior highs and lows to determine a target of $318,000 by December 2021.
“This kind of technical analysis is of little value,” ClassicMacro commented in his tweet. “There is no edge in guessing targets so far in time with TA. All we know is that price is likely to continue going up.”
The Citibank executive drew on bitcoin’s 2010-11 “exponential move” as being “very reminiscent” of the 1970s gold market. Gold had experienced 50 years of a constricted $20–$35 price range before a breakout occurred after a change in fiscal policy by the Nixon administration in 1971.
A decoupling of gold from fiat currencies, the COVID-19 pandemic and the desire for central banks to pursue aggressive quantitative easing policies could lead to future explosive price growth in bitcoin, according to Fitzpatrick.
“Readers love this,” commented ClassicMacro. “What matters here is Citi’s clients being exposed to the bitcoin moon.”