What Bitcoin’s S2F Gap Means for Its $ 100,000 Projections

Bitcoin, at the time of writing, was apparently on the road to recovery. As is always the case, a period of sustained movement always raises the question: Can BTC touch $ 100,000? This is a crucial question, especially since some believe the cryptocurrency should already be at or near $ 100k.

A look at Bitcoin’s 4-year cycle could help us determine when BTC hits $ 100,000.

A major gap

This should have been the case if Bitcoin had followed the path set by PlanB’s stock-flow ratio (S2F) model. This model is based on the logic of “value of scarcity generating value”.

If you look at the S2F deviation chart, you can see that despite the rally that pushed BTC to trade at $ 40,515, the metric has placed BTC at its cheapest price over the past 10 years. While the price of the Royal Coin has steadily increased over time, the indicator appears to be undervaluing the cryptocurrency.

Bitcoin S2F Deviation Model | Source: Glassnode – AMBCrypto

However, by focusing on the “when” part, BTC still has some time before it reaches the aforementioned level. The S2F ratio seems to suggest that the current deviation from the predicted price of Bitcoin is similar to the deviation from November 2018.

At the time, the price was close to $ 5,000 to $ 6,000 and the predicted price was close to $ 9,000. It took 6 months for the price action to correct and BTC was back on track in June 2019

Bitcoin S2F Ratio Model | Source: Glassnode – AMBCrypto

So, if this historic move is factored in, it is to be expected a few more months before Bitcoin hits $ 100,000. Since a rally may well be underway in the future, BTC may hit this price soon.

Additionally, the retracement of Bitcoin’s 4-year cycle eventually happened when the resistance of $ 29,000 turned to support. It now appears to follow the traditional model of a market structure. So the only way forward is upward, but not immediately.

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

How do you identify the $ 100,000 trend?

There are a few metrics to look at here as they will be the first indicators of where the price is heading. First of all, the Adjusted SOPR (aSOPR) must maintain its movement above 1. This is necessary for a steady uptrend. If it falls below, losses can enter the market.

Moreover, the GBTC premium is also improving now, which suggests that institutional interest is also increasing. In fact, it has risen 9% since May, climbing to -8% at the time of going to press. Finally, social volumes and investor sentiment must remain positive to shield Bitcoin from any major bearish movement.

Bitcoin GBTC Premium | Source: Glassnode – AMBCrypto

However, don’t hang all your hopes on the S2F model alone as it is not a bargain metric and its predictions are not absolute. In fact, speaking of its accuracy, this is what CryptoQuant CEO Ki Young Ju had to say,

“I think the S2F model is flawed in terms of demand. This model is based on scarcity and scarcity is about supply. This is why the current price of BTC deviates significantly from the price predicted by the S2F model. If PlanB adds variables to see demand factors, the model can be more precise I think. “


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