- PlanB, a popular but pseudonymous cryptocurrency analyst predicts Bitcoin to trade at $70,000 by May 2022.
- PlanB says that the Stock-To-Flow model will be put to testing by the halving in May.
- Bitcoin price stays within a narrow range between $7,000 and $7,200 ahead of the halving; break above $8,000 is in the offing.
Cryptoassets in the market are dealing with intraday corrections after an upward advancement from key support areas on Wednesday. Bitcoin price fell in tandem with the crude oil price crash on Monday, testing the support at $6,750. As expected the largest cryptocurrency pulled the entire market lower with it. For instance, Ethereum dived back to $170 after testing $191 over the weekend while Ripple fell towards the support at $0.1750.
Bitcoin halving
Bitcoin halving event is getting closer; scheduled to take place in exactly 20 days. The pseudonymous but popular crypto analyst, PlanB while commenting on the event that will see the reward per block mined reduced from 12.5 BTC to 6.5 BTC said that it could trigger a significant crypto rally. However, this rally is expected to take place in a span of two years.
He added that the halving will put to test the stock-to-flow model, currently used to determine the scarcity of an asset in relation to its price. In his opinion, if BTC falls under $70,000 by the end of 2022, then the model would have failed.
[The] 2020 halving will be like 2012 and 2016. As per S2F model, I expect 10x price (order of magnitude, not precise) 1-2 years after the halving. Halving will be make-or-break for S2F model. I hope this halving will teach us more about underlying fundamentals & network effects…
$55k was the original model based on btc market cap. Later models, with newer data and other lost coin adjustment or yearly instead of monthly data, had different values, $70-100k.
Bitcoin correlation with traditional markets
Bitcoin has in the recent past imitated the movements of the traditional markets especially stocks and futures markets. PlanB says that such correlation is normal in times of crisis. However, it will be worrisome if the correlation carries is on after.
During crisis everything is correlated. What’s next is what’s interesting. They will not be correlated forever in my opinion.
Chart of the day: BTC/USD daily
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At the time of writing, Bitcoin is trading at $7,070. There has been a slight correction from the intraday high at $7,191. The resistance at $7,200 is still intact, although Bitcoin advanced from weekly lows at $6,748. A sideways action between the hurdle at $7,200 and the support at $7,000 is coming into play. The consolidation in this zone is expected to result in a breakout above $8,000 based on the pre-halving speculation and post-halving metrics.
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