As Bitcoin recovered above $40k this week, a new wave of optimism appears to have entered the market. Weeks of red candles and lower lows have threatened the conviction of even the most dedicated BTC bulls but now we may be seeing light at the end of the tunnel.
One analyst who has faced considerable critiscm lately is Twitter’s Plan B (@100trillionUSD) who’s Stock-to-Flow (S2F) model gained widespread popularity over the past few years for its accuracy. The model uses a variety of data points related to Bitcoin’s halving algorithm and other factors to predict future price movements. However, the latest crash that saw Bitcoin fall from a high above $60k all the way down to $30k has tested the limits of the model and left some critics questioning its validity. If this current recovery doesn’t continue upwards then the S2F model – which predicts a price of $100k by 2022 – could eventually be invalidated.
Fresh support for the model has recently come from Jurrien Timmer, the Director of Global Macro at Fidelity Investments, who yesterday gave a ‘hat tip’ (H/T) to PlanB in the following tweet:
“At the risk of cherry-picking, the timing of the above chart fits with my supply/demand models below. Both charts suggest that bitcoin is not done with its current bullish phase. h/t to @100trillionUSD”
The tweet was part of a longer thread about Bitcoin, in which Timmer calls Bitcoin “an aspiring asset class that looks to be coming of age, much as gold did during the 1970s”. He follows with a chart that illustrates a clear correlation between the two assets, with gold enjoying a significant uptick in the months following a dip similar to Bitcoin’s current one.
PlanB himself responded to the praise, noting that “he could not agree more” and highlighting Bitcoin’s fast diminishing supply that could eventually eradicate sellers altogether. As Bitcoin continues to languish just below the $40k mark, the positive sentiment reflects a changing tide in the markets and a positive outlook for the future. Could we still see Bitcoin break above $100k this year?