Bitcoin (BTC) closed its third consecutive red month this week when a popular analyst compared BTC trading to January 2019.
In a tweet Thursday, PlanB stated that the BTC/USD rate is now far from the estimates of the transition from reserves to the electric model, which has been calculated for more than two years.
“Make or break” from stock to flow
After the May capitulation, the price of Bitcoin was unable to recover its lost gains and remained at around 50% for the past full period.
As a result, price patterns are undergoing severe tests – even if the indicators on the chain start flashing bullish again.
If the inventory is converted to electricity, which requires an average price of at least $100,000 in this halving cycle, the situation becomes uncertain.
This model is known for its accuracy, and it has taken into account all the reversals of BTC price action since its inception. However, the spot rate is now approaching the limits of what it can afford.
“Even for me, it always gets a little uncomfortable when the price of bitcoin is at the bottom of the stock-to-energy model,” Blanc B admitted last week.
However, given the changes that can occur in Bitcoin over the course of several months, there is no reason to worry that the equity-to-energy ratio will be nullified.
On Thursday, PlanB added “the June closing price of $35,037…significantly lower than the S2F model compared to January 2019”, indicating that it is still “business as usual” relative to the model’s price ratio.
“The next six months will be S2F (again).”
The last time Bitcoin was far from stock-to-strength, which is forecasting a price of $77,760 on Thursday, BTC/USD just emerged from a bear market pit in 2018, dropping to $3,100.
Bitcoin stock pattern as of July 1st. Source: PlanB / Twitter
The patch is waiting in the wings?
As Cointelegraph reported, in recent weeks price dynamics with in-chain indicators have become a defining thing.
Related: Coincidence? Bitcoin saw highs and lows in June.
Criteria such as the popular Puell Multiple method assume that the price bottom is already present on the chart, according to historical precedent, followed by an implied bounce.
Nor should the ongoing transfer of mining operations from China be a cause for concern once it is completed. This weekend, mining difficulty will be the biggest downturn in history due to the unrest, which will rapidly increase miners’ profits and attract new mining business.