Bitcoin Touches Stock-To-Flow Rebound Level
Bitcoin’s (BTC) three-week stay in the $30,000 region has proven to be a hard challenge for one of the most well-known pricing models. Bitcoin is posing a huge challenge to the stock-to-flow price predictive tool, as reported by Philip Swift, co-founder of trading package Decentrader on June 11.
Since mid-May, BTC has been trading in a lower range between $30,000 and $40,000. Day traders are concerned, while vintage bulls are urging patience and a long-term outlook. The stock-to-flow mechanism, according to Cointelegraph, continues to allow for such activity, despite forecasts for a BTC/USD value nearer to $70,000.
PlanB, the project’s developer, has expressed anxiety about the future. If present levels are maintained for an extended length of time, his model may be deemed pointless for perhaps the first time in many years.
Swift said that similar occurrences had happened earlier, citing spot price deviation from the stock-to-flow average as an example. Bitcoin rebounded off a certain price point in relation to the stock-to-flow average every time, finally reaching fresh all-time highs.
He informed his Twitter followers, “It has been a long period of time since pricing has dropped this much beneath S2F line.” “The orange dotted line and arrows at the bottom of the scale illustrate the divergence oscillator, which shows analogous historical eras. Bitcoin’s price has made a strong comeback after similar disparity in the past.”
Because of the realism of May’s price drop, PlanB originally confirmed that this year’s Bitcoin bull cycle is far more typical of 2013 than 2017. A two-tier run to an all-time high was seen in both 2013 and 2017. In each case, that the very first peak was succeeded by a considerable drop, which was subsequently inverted to start a second push to the pinnacle.
PlanB expects that $100,000 per Bitcoin will arrive this year, whereas stock-to-flow forecasts an average selling price of $100,000 or $288,000 from now through 2024. Bitcoin falls under $36K as a century-old financial model forecasts a massive BTC catastrophe. He mentioned two important day moving averages (DMAs) previously this week as a possible launch vehicle for a rebound in the following months.
“If the June close is $54K (or higher) and the July and August closes are likewise $54K (or higher), then the 50DMA will rebound off the 200DMA and remain above it,” he tweeted.
“Another bounce back situation would be a good short squeeze and V-shaped rebound back to $54K (+69 percent).”
It’s a long time since price has been this far below S2F line.
Divergence oscillator at bottom of the chart is highlighted by the orange dotted line and arrows to show comparable historical periods.#bitcoin price rebounded hard from such divergence previously👀🚀 pic.twitter.com/n85sGuT2YQ
— Philip Swift (@PositiveCrypto) June 10, 2021
If June close will be $54K (or higher) and July, August also $54K (or higher), then 50DMA will bounce off 200DMA and stay above 200DMA. So a nice short squeeze and V-shaped bounce back to $54K (+69%) would result in then bounce back scenario. pic.twitter.com/nqqgyPM8Ls
— PlanB (@100trillionUSD) June 8, 2021