Raoul Pal: Bitcoin Chart Similar To Rise Of Amazon, BTC Is ‘Undervalued’
Raoul Pal, the Chief Executive of Real Vision chief is looking into the historical price action of e-commerce giant Amazon and its resemblance to Bitcoin (BTC) chart since 2013.
Pal shared with his 864.5K followers on Twitter that Amazon (AMZN) followed Metcalfe’s Law, according to which a network grows in value as the number of users on the network gets bigger.
In the early 2000s, Amazon was a highly volatile stock with drawdowns as deep as 50%, the macro analyst points out.
The Real Vision CEO also compares Amazon’s market structure in 2010, to the price action of Bitcoin in the last 12 months, which he says looks very similar.
“In the short term, 2010 Amazon looked like this…”
Should Bitcoin follow Amazon’s price action in 2010, it is possible that BTC might revisit crucial support at $30,000.
“It suggests BTC might even possibly test $30,000 but I doubt it (I think the sell-off is near done). but who the hell knows! It’s similar enough for context but never rely on fractals. They are for context only. The BTC fractal is longer in time than AMZN and more volatile. In the end, it’s all noise. The log chart is the truth and that is in itself an approximation of Metcalfe’s Law. If it isn’t noise to you, your position is too big for your time horizon.”
Pal also points out that according to Metcalfe’s Law, Bitcoin’s value should be around $100,000, which would suggest that the leading digital asset is greatly undervalued at its current price of $41,768.
“BTC is cheap vs Metcalfe’s Law….(and has been for a long time – my guess is because there is less network applications on BTC currently than ML [Metcalfe’s Law] would prefer).”
