PlanB Analyzes Worst-case Scenario For Bitcoin in July
A widely-followed crypto analyst and trader, who became famous for being the first to apply Stock-to-flow (S2F) to Bitcoin, lays out Bitcoin’s worst-case scenario for July 2021.
According to the analyst, known as PlanB, the S2F is in a “make or break” phase, where it will either be further confirmed or invalidated in the next six months.
The S2F model has traditionally been applied to commodities like gold and silver. It predicts the performance of an asset based on the idea that the price increases as the asset becomes more scarce.
According to PlanB’s S2F model, Bitcoin should be topping out at $288,000 this bull run. However, in a recent tweet the analyst tells his 609K Twitter followers that Bitcoin’s bearish price action is challenging the model.
June closing price $35,037 .. as far below S2F model as in Jan 2019. Next 6 months will be make or break for S2F (again). pic.twitter.com/W3TM5sOAwY
“June closing price $35,037… As far below S2F model as in Jan 2019. Next six months will be make or break for S2F (again).”
PlanB draws the worst-case scenario for Bitcoin this month is a monthly close at $28,000. However, according to the analyst says brighter days are ahead for the number one cryptocurrency and the worst possible monthly close for BTC in August is $47,000. He also says that $64,000 was not the peak of the bull run.
My on-chain data (color overlay in the chart below) tells me this bull is not over and 64K was not the top. That is in line with s2f(x) model. Also my floor indicator (not based on s2f) says we will not go below 47k Aug close. pic.twitter.com/K6Hfjdp26x
The analyst also admits that he may have jumped the gun on dismissing the idea of diminishing returns, or the concept that each Bitcoin bull cycle gets less volatile, and therefore peaks at a lower price relative to the previous one.
According to PlanB the next six months will determine whether that’s true, he’s betting that BTC will land somewhere well into the six figures by the end of the bull run.
Looks like I was too early dismissing diminishing returns scenario. I fact, this will be the key question next 6 months: 1) Was $64K the top and will we oscillate between $25K-50K? 2) Or was $64K not the top and will the bull market resume towards S2F $100K-288K? My money is on 2 pic.twitter.com/0JRFDHh2Tb
“Looks like I was too early dismissing diminishing returns scenario. In fact, this will be the key question next 6 months: 1) Was $64,000 the top and will we oscillate between $25K-50K? 2) Or was $64,000 not the top and will the bull market resume towards S2F $100,000-$288,000?
My money is on two.”
At time of writing, Bitcoin is trading at $34,554 according to CoinMarketCap.
