Categories: Bitcoin

Bitcoin forms the third monthly red candle in a row, repeating the stock-to-flow price pattern from early 2019

This week, Bitcoin closed its third straight monthly red candle as a prominent analyst compared BTC’s price action to January 2019.

In one tweets On July 1, PlanB said that BTC / USD is currently furthest away from the stock-to-flow model estimate in over two years.

Stock-to-flow: “Live or die“

After the massive surrender event in May, Bitcoin price action has not returned to its level and is currently around 50% below its recent all-time high.

As a result, price patterns are being tested seriously – even if many indicators in the chain become bullish again.

For stock-to-flow with an average price of at least $ 100,000 during this halving cycle, the situation becomes uncertain.

This model is known for its accuracy and has accounted for every move in the BTC price movement since its inception. At the moment, however, the spot price is approaching the limit of what it can absorb.

“Even for me there is always a bit of uncertainty, as the Bitcoin price is currently at the lower end of a stock-to-flow model,” PlanB admit last week.

Source: PlanB

However, since Bitcoin is likely to see changes in a few months, there is little to worry about the stock-to-flow model becoming invalid.

“It ended June at $ 35,037, much lower than the S2F model as of January 2019,” PlanB added today, suggesting that the pattern’s relationship to price is still “working as it should.” normal”. The next six months will be of crucial importance for S2F (again). “

Bitcoin was also still a long way from the stock-to-flow model at the beginning of 2019. At the time, BTC / USD had just emerged from the depths of the 2018 bear market, dropping to just USD 3,100 at times.

paradigm Stock-to-flow bitcoin on July 1st | source: Plan B

According to the Twitter account that is tracking the S2F multiple data, the price the model is predicting for today is $ 77,760 while the actual price is currently less than $ 34,000.

Stock-to-flow multiple (463d)
2021-06-30, 23:59 UTC

ln (actual / model)

Actual price: $ 35,065.47
Model price: $ 77,760.57
S2F multiple: -0.8 pic.twitter.com/Z7eMOez15r

– S2F multiple (@ s2fmultiple) July 1, 2021

REDAdjustment is imminent?

As reported, “catching up” the price against on-chain indicators has become a hot topic in the last few weeks.

For example, the popular Puell multiple indicator signals a likely low point that is consistent with historical precedents. Analyst Rekt Capital comment:

“The fact that we are in the green Puell multiple does not necessarily mean that we are at the bottom.”

diagram Pull out several bitcoin | source: Bybt

Also, the fact that miners are constantly pulling out of China will be less of a concern once the process is complete. The mining difficulty will see its biggest decline due to important changes later this week. Accordingly, active miners will make more profits and attract new mining power.

Blockstream CEO Adam Back tweeted:

looks like it’s still tracking -25% #bitcoin Adjust difficulty level for Friday. https://t.co/TuqYAFU1wU Bitcoin not affected, tick-tack next block. profitable mining pic.twitter.com/yONPd88xJq

– Adam back (@ adam3us) June 29, 2021