PlanB, the popularizer of the Bitcoin stock-to-flow (S2F) model, says the current bull run has a second leg.
PlanB is “waiting” for the second stage of this Bitcoin bull market
According to PlanB on Twitter, the S2F and S2FX models predict a second leg in the current bull run that will bring new highs for BTC.
As the name suggests, the Bitcoin S2F or stock-to-flow model is based on the relationship between the stock (supply) and the flow (supply).
The model is actually general, i.e. it can be applied to any commodity. The higher the S2F, the scarcer the asset.
The method was popularly used for precious metals like gold and silver, while PlanB applied it to Bitcoin. This is what the current S2F price chart for BTC looks like:
The price as predicted by the Bitcoin S2F model | Source: buybitcoinworldwide.com
As the graph shows, the price of BTC appears to be remarkably close to the line predicted by the S2F model. There are certain areas of variance, but the overall trend still seems intact.
Related reading | A cross-generational Bitcoin buy signal is almost back
Below is the diagram that PlanB released today. It shows the trajectory of BTC after halving in 2012, 2016 and 2020.
Red indicates the current 2020 bull run | Source: PlanB
The two green lines in the chart show the price targets predicted by the S2F and S2FX models. The S2FX model is a slight modification of the original S2F method.
As the graph above shows, both the 2012 (cyan) and 2016 (blue) rallies seem to follow a certain pattern after halving. The peak seems to have moved later for the 2016 run compared to the 2012 run.
Related reading | Bitcoin accumulation patterns show that the rally may only be in the early stages
If there is indeed a pattern here, then the current bull run is not over and has not yet peaked. Since the time between the halving and the peak only seems to increase, it will take a while for the current one to reach it. This is the “second stage” that PlanB expects.
At the time of writing, Bitcoin is priced at just under $ 36,000, up 15% over the past 7 days. Here is a graph showing the coin’s performance over the past 3 months:
BTC's price shoots up | Source: BTCUSD on TradingView
Bitcoin continued to rise over the weekend as the coin breaks above $ 45,000 for the first time since May 16. It is unclear whether crypto can maintain the trend and keep it moving, or whether it would hit another wall of resistance and slide back down.
If the S2F pattern does hold, then perhaps BTC is headed for a bull run. A related S2F indicator also suggests that the coin will move on a rift after hitting a key trend line.