The bitcoin (BTC) price could increase ten times over after the halving next month, the creator of the well-known stock-to-flow BTC price model PlanB stated on Thursday, April 16.
The famed analyst predicts that the block reward halving that is less than 30 days away will spark a frenzied bull run that will take the top crypto to new highs, as per his traditionally accurate S2F model.
Bitcoin Price Should Increase 10x 1-2 Yrs After Halving: PlanB
The pseudonymous yet popular analyst PlanB took to Twitter to share his views on bitcoin’s price after the upcoming halving. He asserted that he expects BTC’s third halving to be like the previous halvings in 2016 and 2012.
After these two halvings, bitcoin saw a meteoric rise in the months following the event as bitcoin registered new all-time highs. Experts have argued that this time might be different due to the looming recession as COVID-19 drives the global economy to a meltdown.
Nonetheless, PlanB insists that the price of bitcoin is perfectly in line with the stock-to-flow model. In fact, he expects the bitcoin price to gain at least 10x from its current price one or two years after the miners’ rewards are halved.
PlanB noted that the May halving will be a “make-or-break” event for the stock-to-flow model. In other words, if bitcoin fails to increase tenfold, we should consider his bitcoin price forecasting model invalidated.
In a follow-up tweet, PlanB cites that although he expects the S2F-price relationship to hold, he will discard the model en masse if BTC does not increase 10x.
Bitcoin Is Right On Target
In mid-March, Bitcoin experienced the worst single-day loss since 2013. PlanB, however, maintained that despite the crash, bitcoin was still in line with the S2F model as it remained well within the model’s bands.
More recently, he observed that Bitcoin’s Relative Strength Index (RSI) is the weakest it has ever been prior to halving. RSI is a technical indicator that shows whether an asset is oversold or overbought at a certain price. As of now, BTC’s RSI is at historic lows -suggesting that the OG crypto is chillingly oversold just days before halving.
Bitcoin’s halving (quantitative hardening if you like) reduces miners’ revenues by half. This decreases BTC’s annual inflation, subsequently improving its stock-to-flow ratio as it gets closer to that of gold.
The stock-to-flow model has historically predicted bitcoin’s price correctly. Interestingly enough, the model even factored in the unprecedented bloodbath last month.
Bitcoin is currently hovering just above $7,000. Per PlanB’s model, BTC should hit $100,000 by December next year. Whether bitcoin increases tenfold after May’s halving is anyone’s guess.
