A lot of you might be familiar with “PlanB” and his Stock to Flow model for Bitcoin, you will also know that it failed to predict the market tops in 2021 and how low BTC's price would go during bear market. I have done the below analysis in early 2022 and published as part of my newsletter on March 12th, so while BTC was still fluctuating between 38-48k and no one would take my analysis seriously at the time, calling for BTC possibly moving as low as 16.7k. Fast forward to Nov 2022 and BTC was floating around and even under that level for a good while. Please read all parts for full analysis and how you can use this in the future. ________________________________________________________________________________ What is Stock to Flow (S2F) Ratio Bitcoin’s S2F Ratio is defined as a ratio of currently circulating coins divided by newly supplied coins and it assumes that the scarcity of BTC drives its price. In short, it can help us find true value of Bitcoin and where price might go next. Keep on reading as I reveal how it clearly gave signals in 2021 at what price levels to exit and what BTC will be worth in 2024/25. S2F ratio “jumps up” every halving which can be clearly seen on the S2F chart. As the scale on the free chart isn’t calibrated correctly I have created my own pro chart (this is an excellent feature on CQ) and this will serve as basis for my further S2F Bitcoin ratio analysis. ________________________________________________________________________________ Early years I am sure everyone would like to send a message to the past, telling yourself to buy Bitcoin, as it was a bargain even at the height of 2013 bull run. As you can see on the pro chart attached (Orange=BTC price, Blue=S2F) , price stayed way below S2F targets hinting it was a great time to invest. As you know each halving so far, had a bull run shortly after the halving event, followed by a bear market. While 2013 top did not “catch up” with S2F price, it did hit the pre-halving levels.
Written by gigisulivan
