Bitcoin is the Front Running Stock for the Flow Price Model of $ 7300
Despite dropping around $ 1000, Bitcoin is still far ahead of some of the most optimistic price developments and detailed price forecasting models. Here's a look at how Friday's "flash crash" hasn't tracked Bitcoin in the long run.
Current Bitcoin Price Still Leads to $ 1 Million S2F Model
Tweeting on Saturday (May 18, 2019) Bitcoin Analyst "PlanB" showed how even at $ 7,300 the BTC still holds the stock-to-flow model ( S2F) about $ 1[ads1]000 on the road to beat $ 1 million per coin.
#bitcoin at $ 7300 .. $ 1000 over the S2F model value ? pic.twitter.com/2VkSiP4Oc0
– planB (@ 100trillionUSD) May 18, 2019
PlanBs S2F -model states that scarcity and value have a direct relation to scarcity as a measure of the stock flow (SF). The analysis also takes into account key parameters such as the Bitcoin block reward halving every four years until all 21 million BTCs are diluted.
According to the model, at the time of the next halving that is in May 2020, BTCs SF should double from the current value of 25 to 50. This doubling will bring BTC's SF closer to what goods like gold.
BTC permabulls like Max Keizer say Bitcoin has the potential to reach a fraction of the gold market value that is somewhere around $ 8 trillion. The S2F model predicts that the BTC by 2020 should have a market price of $ 55,000 based on a SF value of 50.
S2F strongly favors scarcity, which for BTC takes on another dimension given that part of the 21 million Total token supply is not even achievable since some BTC is forever lost.
Data from BitInfoCharts shows that there are around 16.82 million BTC held in sleeping Bitcoin addresses. Between cumulative BTC dust and lost private keys, there are about 10.5 million BTCs that have not moved over a year.
Perfect Pullback?
Before Friday's fall in prices, there had been talk of a possible bargain in the BTC price action to the mid $ 6000 level. These forecasts depended on a huge profit that took over $ 7,000, creating a new entry point for a new BTC accumulation in preparation for a fresh upward turn.
In the short term, there is an expectation that BTC may fall further down perhaps to 50-day or 200-day moving average support levels. This gives a possible downward glide between $ 4,500 and $ 5,500.
However, such a move would mean breaking the support level of $ 6,400 which characterized BTC trading for most of 2018. Only the fall of the Bitcoin Cash drilling circle in November 2018 took BTC below this price level.
Do you think the flash crash is adversely affected by Bitcoin's parabolic advances? Please let us know in the comments below.
Pictures via Twitter @ 100trillionUSD and BitInfoCharts.com, Shutterstock
