The spending on Bitcoin (BTC) over a period of three weeks while it is in the range of $30,000 is turning out to be an important test for a price model that is one of the most popular ones. On Thursday, Philip Swift, Decentrader’s co-founder, noted that Bitcoin has issued a huge challenge to this tool used for forecasting price known as stock-to-flow.
Is It Time For Bitcoin To Bounce Back?
The price action for Bitcoin has been staying near a lower range extending from $30,000 to $40,000. This has been the case since the middle of May. Day traders have been worried about this. However, vintage bulls are calling to keep calm and have a mindset focused on the long term.
Cointelegraph had reported that the model based on stock-to-flow remains accommodating of behavior like this. However, the estimates made by the model are calling for the value of BTC/USD to be nearer to the $70,000 mark.
PlanB, the creator of this model, has nevertheless voiced some concerns over what the future might hold. If the levels that are currently going on, remain for much longer, his model will run the risks of being invalidated. This will be the 1st time for something like that to happen in the history of the model.
Highlighting divergence in the spot price from the average stock-to-flow, Swift pointed out that similar instances have taken place in other points of time as well. Every time, Bitcoin had bounced from a given relative price point to the average stock-to-flow value. Eventually, it would hit a new record high.
He told his followers on Twitter that it’s been a very long period of time since the Bitcoin prices have been so far underneath the S2F line. However, PlanB believes that it is still possible for Bitcoin to reach the $100,000 mark in 2021.