Bitcoin price still can’t crack back above $60,000 and prices are slowly moving downward. And while the creator of the popular stock-to-flow model agrees there’s no avoiding regular corrections in the leading cryptocurrency, the top of the current cycle is “nowhere near.”
Here’s a closer look at why the model’s creator is so confident in further price appreciation, along with a technical look at where the cryptocurrency could be in the current cycle, in comparison to previous cycles.
Stock-To-Flow Creator Says The Top In The Current Cycle Is “Nowhere Near”
Bitcoin is well on the way to proving the highly cited stock-to-flow model for predicting future price appreciation to be true. The now revised mathematical model takes into consideration the asset’s limited supply, regularly scheduled halvings, and other factors to formulate a potential trajectory the price per BTC should loosely follow.
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Due to the cryptocurrency’s notorious volatility, price can fluctuate significantly yet still for the most part follow the stock-to-flow model’s trajectory. Plan B, the model’s creator took the opportunity to remind followers of the prediction tool that the cryptocurrency can rise or fall by 20% or more in short timeframes.
Stock-to-flow creator says that the top is "nowhere near." | Source: Plan B on Twitter
But regardless of any of the intraday noise, he concludes, this bull run is “nowhere near the top.” Plan B claims that this is both due to what the modified S2FX model predicts, along with outrageously bullish on-chain metrics.
The S2F creator is joined by other top crypto analysts who point to fundamentals that suggest further price appreciation is only a matter of time. There’s less BTC on exchanges, miners are no longer selling, and much more in the coin’s favor.
Beware: Bitcoin Is Overdue For Deeper High Timeframe Correction
At this point, few who understand what Bitcoin has to offer the world expect anything less than hundreds of thousands of dollars per coin. The stock-to-flow model is almost a self-fulfilling prophecy in that respect, where if enough believers expect this to happen and hold as a result, the chances increase that it actually is the ultimate outcome.
But along the way, like the S2FX model creator says, Bitcoin is volatile and that’s likely to remain a key factor in its long-term growth. Even if the top is miles or months away, that doesn’t mean the trending cryptocurrency can’t retest levels lower.
The fifth month after breaking the former ATH acts as the bull market bounce bottom | Source: BTCUSD on TradingView.com
According to a technical look at past cycles, Bitcoin is due for a higher timeframe shakeout of epic proportions. Each bottom tends to occur on the fifth monthly candle after surpassing the former all-time high.
In 2013, Bitcoin fell 74% from the breakout high, to rebound low. It then went on to rise from $64 per coin to $1,200 in the next four months. In 2017, Bitcoin fell 36% to $3,000 then in three months rocketed to $20,000. The same zone ended up acting as the most recent bear market bottom.
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The current consolidation could be building a similar type of base. The base building might conclude, however, with a fake out to the downside has it has done in the past, before heading into the final phase of the bull run. The final phase is where the majority of the gains are made, bringing another 1500 and 500% ROI from the two preceding cycles.
If this projection is correct, a crash could be coming that causes investors to question that the top is in. But like the S2F creator says, its nowhere near, and the move is rather normal volatility on the way to much higher prices ahead.
Featured image from Deposit Photos, Charts from TradingView.com