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Bitcoin was apparently on the way to recovery at the time of writing. As always, a period of sustained movement always raises the question: can BTC touch $100,000?

This is a very important question, especially if according to some, the cryptocurrency should already be at or close to $100,000. A look at BTC’s 4-year cycle can help us understand when Bitcoin (BTC) will reach $100,000.

A big divergence in the Bitcoin pattern

This should have been the case if Bitcoin had followed the path determined by PlanB’s Stock-to-Flow (S2F) model. This model is based on the logic of ‘higher-frequency value’. If you look at the S2F divergence chart, you can see that the metric has placed BTC at the cheapest price for 10 years, despite the rally that pushed BTC to trade at $40,515. The indicator seems to be underestimating the cryptocurrency as the price of the leading coin has steadily risen over time.

Bitcoin S2F Divergence model | Source: Glassnode

However, focusing on the “when” part, BTC still has some time to reach the aforementioned level. The S2F ratio shows that the current deviation from Bitcoin’s predicted price point is similar to the one in November 2018. At that time, the price was between $5,000 and $6,000, and the estimated price was close to $9,000. It took 6 months for the price action to correct itself and Bitcoin (BTC) was back on track by June 2019.

Bitcoin S2F Ratio Model | Source: Glassnode

So, given this historical movement, it should wait a few more months before Bitcoin reaches $100,000. BTC could reach this price point soon as a rally could be on the move forward. Additionally, Bitcoin’s 4-year cycle correction finally took place when the $29K resistance turned into support. Now, it seems to follow the traditional pattern of a market structure. Therefore, the only road ahead, if not immediately, is up.

Bitcoin’s 4-year cycle | Source: Rekt Capital

How to determine the trend of 100 thousand dollars?

A few metrics need attention here as they will be the first indicators of where the price is heading. First of all, the adjusted SOPR (aSOPR) needs to keep its movement above 1. This is necessary for a stable uptrend. If it falls below that, losses could enter the market.

Also, Cryptocoin. As we have reported as com, the GBTC premium is also improving, which shows that corporate interest is also increasing. In fact, it’s up 9% since May, to 8% at the time of writing. Finally, social volumes and investor sentiment should remain positive to protect Bitcoin from any big bearish moves.

Bitcoin GBTC Premium | Source: Glassnode

However, don’t tie all your hopes to the S2F model alone, as this is not a boon metric, nor is it a mudollary estimate. In fact, this is what CryptoQuant CEO Ki Young Ju had to say when talking about its accuracy:

I think the S2F model is flawed on the demand side. This model is built on kdollarsuk, and it relates to childrens often on the supply side. Therefore, the current BTC price deviates drastically from the price predicted by the S2F model. I think the model could be more accurate if PlanB added some variables to see the demand side factors.


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Michael Lewis

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