The “conservative” BTC supply shock metric now states that Bitcoin should cost at least $ 55,000


Bitcoin (BTC) should cost at least $ 55,000 per coin, according to a metric that measures its so-called “supply shock”.

In a tweet on September 5, analyst Willy Woo emphasized what he added was a “conservative” estimate of the price of BTC / USD.

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While Bitcoin still hasn’t established $ 50,000 as solid support, on-chain metrics have been significantly more bullish for some time.

Now the so-called “supply shock valuation model” has been added, which specifies a conservative price estimate of 55,000 US dollars.

The supply shock is simply the unavailable BTC supply divided by the available BTC supply. This goes deeper than at first glance, as Woo effectively “waves the magic wand and gauges the intentions of investors before the bids and offers are even placed”.

“From this supply and demand perspective, an investor who has no intention to sell is on the demand side while an investor willing to sell is on the supply side,” he said in a blog post last month.

The valuation model also uses an algorithm to compare similar supply and demand situations as before and thus create a fair price estimate.

“It’s conservative as one of the SS metrics, Exchange SS, is now above all time highs, so no looking back is possible,” Woo confirmed in the tweet, referring to the ratio of coins in cold stores to record exchanges.

The attached chart shows when BTC price moved with and without changes in investor intent.

Bitcoin supply shock valuation model. Source: Willy Woo / Twitter

$ 50,000 first hurdle for cops

Bitcoin’s supply shock is a commonly used term in the current marketplace as 2021 is the year after block subsidies have halved.

Related: More like “shock-to-flow” – the BTC price hits the bull trigger as mysterious buyers take advantage of the supply

Since miners now only unlock 6.25 BTC per block, Bitcoin has so far largely behaved similarly to previous years after the halving – 2013 and 2017.

The conservative minimum target of $ 55,000, however, is above another set of month-end minimums from analyst PlanB, which assumes that September will have a minimum monthly close of $ 43,000.

After that, however, the upward trend continues in earnest, with Bitcoin closing at at least $ 135,000 in 2021.

At the time of writing, BTC / USD was trading at $ 50,200 after staying in a tight range all weekend.

BTC / USD 1-day candle chart (Bitstamp). Source: TradingView