Second stage of Bitcoin bull market has begun, says creator of BTC pricing model
Bitcoin (BTC) marking a new high of $ 67,000 last week opened up the possibility of reaching $ 100,000 by the end of this year.
PlanB, creator of the popular Bitcoin Stock-to-Flow (S2F) model, called Bitcoin’s price retracement from the $ 60,000 level the “2nd step” of what appeared to be a long-term bull market.
– PlanB (@ 100trillionUSD) October 26, 2021
In doing so, the pseudonymous analyst cited S2F, which expects Bitcoin to continue to rise and reach $ 100,000 to $ 135,000 by the end of the year.
The price projection model insists that Bitcoin’s value will continue to grow to at least $ 288,000 per token due to the “halving,” an event that takes place every four years and is reduced by half BTC’s issuance rate from its supply cap of $ 21 million.
Notably, Bitcoin has undergone three halves so far: in 2012, 2016 and 2020.
Each event reduced the new cryptocurrency supply rate by 50%, which was followed by notable increases in the price of BTC. For example, the first two halves caused the price of BTC to rise by over 10,000% and 2,960%, respectively.
The third halving took the price from $ 8,787 to $ 66,999, an increase of 667.50%. So far, S2F has been largely accurate in predicting Bitcoin’s price path, as shown in the chart below, leaving the bulls with more hope that the rally after Bitcoin’s halving will see its prices cross the $ 100,000 mark.
PlanB noted earlier this year that Bitcoin will hit $ 98,000 by November and $ 135,000 by December, adding that the only thing that would prevent the cryptocurrency from reaching a six-digit value is “an event of black swan “that the market has not seen in the last decade.
80% crash later
Despite the high price projections, Bitcoin can still see big corrections in the future. PlanB believes the next crash could wipe out at least 80% of Bitcoin’s market cap, based on the same S2F model.
Related: COVID-19 Vaccine Will Trigger Bitcoin ‘Crash’ – Rich Dad Poor Dad Author
“Everyone is hoping that the supercycle or hyperbitcoinization starts right now and that we don’t have a big crash after the next all-time highs,” the analyst told the unleashed podcast, addition.
“As much as I hope it was true, that we don’t see this accident anymore, I think we will. […] I think we’re going to be run by greed right now and fear later and see another 80% minus after going over a few hundred thousand dollars.
But not everyone thinks the next correction will be as dramatic as the previous ones. Dan Morehead, CEO of Pantera Capital, said in mid-October that the next Bitcoin price drop will be less than 80%, citing a steady drop in sell sentiment after each halving cycle.
Bitcoin last week set a new high at around $ 67,000 after rallying 53% in October so far. But the new highs prompted traders to take profit, prompting further tests of the $ 60,000 support level.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.