Renowned crypto analyst and creator of the Stock-to-Flow (S2F) model PlanB has published a long-term chart called Bitcoin Market Stages. According to him, the new model is based on only one on-chain variable – but he does not disclose which one. According to the analyst’s interpretation of the data, the bull market for Bitcoin began in January 2023.
PlanB explained that, unlike Stock-to-Flow, the Bitcoin Market Stages model is not predictive or estimative. Its sole purpose is to try to determine what stage of the market cycle BTC is in. the advantages of its new model in simple words:
“This is my favorite chart after Stock-to-Flow. It is very simple, intuitive and useful,” he comments.
The bitcoin market moves in cycles
Bitcoin Market Stages is based on the assertion that any market, including cryptocurrency, moves in cycles. Moreover, these cycles are based on mathematical and fractal similarities, which are nothing more than a quantitative representation of human psychology.
The new PlanB model is very simple – it assumes that the market cycle consists of 4 successive phases or stages:
- Early bull market (blue)
- Late bull market (green)
- Early bear market (yellow)
- Late bear market (red)
According to the chart above, the late phase of the bear market ended at the end of 2022. Moreover, she completed the 4th consecutive cycle, counting from 2011.
Analyst Plans to Update S2F Model
PlanB is also discussing an update to its famous Stock-to-Flow model based on historical price action and bitcoin scarcity data between halvings. For several years, the analyst has created at least 3 versions of S2F. The original model was published in 2019 and took into account monthly estimates of the value of BTC and its deficit – according to it, the current price of the asset is estimated at $55,000.
The other two versions are the annual S2F model and the so-called Stock-to-Flow (S2FX) cross-asset model. According to the first, the average price of BTC in the current cycle should be $100,000. According to the second, up to $288,000. Although the latter value is significantly different from the current price of Bitcoin, PlanB states:
“I still believe that the stock-to-flow cross-asset model based on gold and silver is fundamentally the most valuable.”
PlanB believes that the price of bitcoin will rise by 100% in 2024
The analyst suggests that in the future, bitcoin will be 2 times more scarce than gold, and will overtake the precious metal in market value. At the moment, the capitalization of gold is about $10 trillion, which exceeds the capitalization of BTC by about 20 times.
PlanB notes that the price of bitcoin is currently reversing and approaching the values set by the model. According to him, after each halving, the price of BTC reached exactly the values that were assumed by the original Stock-to-Flow model.
If this happens again next time, the main cryptocurrency will approach the $55,000-$60,000 area, which will be equivalent to an increase of about 100% compared to current values.
According to the latest forecasts, the next halving should occur in April 2024. This means that in the coming year, Bitcoin will have to show an average increase of $2,500 per month.
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