On Monday, Bitcoin posted a significant breakout. The top crypto climbed from $11,700 to a little over $12,400 in the space of just a few hours. This move hurled the bitcoin price above the crucial $12,000 level, which acted as strong resistance in the last 14 days.
At the time of publishing this, Bitcoin has corrected lower to $11,871. But despite the wild price fluctuations over the past few days, the creator of the controversial stock-to-flow creator, PlanB, has affirmed that bitcoin is officially in a bull market.
“Bull Market Confirmed”
Quant analyst PlanB, who is popular for creating the bitcoin stock-to-flow model took to Twitter on August 18 to share his analysis. The analyst noted that bitcoin is looking particularly strong with its relative strength index (RSI) currently registering 64.
For those unaware, the RSI is a momentum indicator that is used to determine the overbought and oversold conditions of an asset at a particular price.
Per the chart that PlanB shared, bitcoin’s current RSI reading is reminiscent of 2012 and 2016. During both times, BTC had a high RSI reading and was followed by a massive bull rally after halving.
#Bitcoin looking strong, RSI 64, bull market confirmed pic.twitter.com/gbbHyHm7oR
— PlanB
It’s worth pointing out that the latest iteration of PlanB’s stock-to-flow model know as the stock-to-flow cross-asset model (S2FX) predicts that bitcoin will shatter the $288,000 mark by the end of 2024.
As aforementioned, PlanB believes a new bull market is already underway. Should bitcoin continue surging according to the S2F model, one market observer suggests that Wall Street will be in for a shock.
Wall Street Is Not Ready For What Comes Next If S2F Model Is Accurate
PlanB’s S2F model has attracted its fair share of naysayers who believe it is way too rosy. On the off chance that it is indeed valid, analyst Preston Pysh says Wall Street will not be prepared for what will come next.
This is because “most market participants are accustomed to looking at things in linear terms…not log terms” that crypto experts use to determine BTC’s value in the long-term.
The benchmark crypto is a logarithmic asset. This means that its adoption grows at a steady rate. As such, the bitcoin price is mapped in log charts and not linear charts like equities.
Can bitcoin continue following the path described by the stock-to-flow model? That remains to be seen.
