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Stock to Flow model

Bitcoin bulls have a lot to be thankful for despite BTC ‘probably’ not hitting $98K in 5 days

Hodlers are up 200% since last Thanksgiving, as PlanB prepares for the first miss on record for his Bitcoin price floor prediction model.

Bitcoin (BTC) will "probably" miss out on its predicted monthly close for November, analyst PlanB concedes.

In a Twitter update on Nov. 25, the creator of the "worst case scenario" end-of-month price forecasts prepared to accept defeat for the first time.

First ever miss "probable" for Bitcoin floor model

At around $40,000 short, Bitcoin is currently far below what should have been its minimum monthly close for November.

Now, PlanB acknowledges that BTC/USD hitting $98,000 in the next five days is somewhat unlikely.

"Floor model $98K Nov close will probably be a first miss (after nailing Aug, Sep, Oct)," he said as part of Twitter comments. 

In an appearance on the podcast series hosted by Saifedean Ammous, author of "The Bitcoin Standard" and "The Fiat Standard," on Nov. 11, PlanB explained his prior confidence in the floor model lying in its mathematical nature.

"If we don't hit the $98,000 at the end of November, that would be a first on this specific indicator in the entire history of Bitcoin," he said.

The series correctly predicted — almost to the letter (or number) — the $47,000, $43,000 and $63,000 monthly closing price for August, September and October, respectively.

Thanks for 200% yearly gains

Despite breaking with tradition, the floor price model's letdown will have no impact on PlanB's seminal stock-to-flow model series, he noted, after repeated confusion about the two being somehow related.

Stock-to-flow (S2F) currently demands an average BTC/USD price of $100,000 this halving cycle, with Q4 2021 given as a suitable timeframe for the level to appear for the first time.

Its sister model, stock-to-flow cross-asset (S2FX), goes further with a $288,000 average, this nonetheless also coming in for criticism in recent weeks as BTC underperforms.

Speaking to Ammous, PlanB nonetheless said that the gap between spot price and the S2F model price has not yet threatened to invalidate it.

The model uses standard deviation bands to track progress, and so far this month, BTC/USD has stayed well within the acceptable range.

BTC/USD vs. stock-to-flow chart with standard deviation bands shown. Source: S2F Multiple/ Twitter

As Cointelegraph reported, meanwhile, a host of other indicators remain firmly bullish on the future, with the current price phase considered more as consolidation than the prelude to a deeper crash.

BTC/USD began 2021 at $29,000, while versus last Thanksgiving, hodlers are up over 210%.

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Great buy? Bitcoin trades at record 59% below stock-to-flow BTC price model target

Bitcoin has never been so far below where stock-to-flow predictions call for it to be.

Bitcoin (BTC) has never been as far below its target price as it is now, the stock-to-flow model shows this week.

In a tweet on July 10, Lex Moskovski, chief investment officer at Moskovski Capital, showed stock-to-flow flagging a historic moment in Bitcoin's twelve-year lifetime.

"Great buying opportunity"

With BTC/USD showing few signs of a genuine bullish recovery, the pair has been drifting ever further from the price that the stock-to-flow price model calculates it should have.

Stock-to-flow is arguably the most popular of the Bitcoin forecasters, and has historically tracked BTC price action with surprising accuracy, taking every anomaly into account to remain valid.

As Cointelegraph reported, however, current behavior is giving stock-to-flow a run for its money, and as of now, its target price comparatively has never been so far from reality.

"Negative Stock-To-Flow deflection is the highest it's ever been in the whole Bitcoin history," Moskovski commented.

"This is a great buying opportunity, if you're a believer in this model."
Bitcoin stock-to-flow deflection vs. BTC/USD chart. Source: Lex Moskovski/ Twitter

According to the Stock-to-Flow Multiple, BTC/USD should be trading at $82,703 on Saturday. At the time of writing, the actual spot price was $33,850 — 59% lower.

The model's creator, PlanB, has stuck by a seriously bullish view on Bitcoin for 2021, his latest price prediction calling for $135,000 by December as a "worst-case scenario."

The analyst is currently off the grid and not commenting on events, promising to return in August, which has a minimum price target of around $47,000.

Bitcoin stock-to-flow model as of July 10. Source: BuyBitcoinWorldwide.com

Stock-to-flow faces serious bear calls

PlanB has never ruled out stock-to-flow becoming invalidated at any point, and this could become a reality if the most bearish scenarios become reality.

Related: PlanB feeling ‘uneasy’ as 41% of his followers tip $100K BTC won’t happen this year

Among them is a $10,000 warning from Scott Minerd, the Guggenheim executive who this week claimed there was not "any reason" to buy Bitcoin under current conditions.

Other data points to an extended recovery period for Bitcoin fundamentals, while December could bring selling pressure once more, in line with historical precedent. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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