Trend Line Touch Could Send Bitcoin On A Tear
04 August 2021 - 5:00AM
NEWSBTC
Popular Bitcoin model Stock-to-Flow (S2F) shows BTC has touched a
trend line that has historically sent the crypto flying. Bitcoin
Touches S2F Deflection Trend Line As pointed out by a crypto
analyst on Twitter, BTC seems to have just touched a lower S2F
deflection trend line. The S2F or Stock-to-flow Bitcoin model helps
in predicting the price of BTC. The method has proved to be
remarkably accurate so far, besides a few points of deviation. S2F
model is based on the ratio between the stock (supply) and the flow
(annual production). The model can be applied to any asset, not
just BTC. A higher value of the indicator means the commodity is
more scarce. Here is how the latest S2F chart for Bitcoin looks
like: The BTC S2F chart seems have a negative deflection at the
moment | Source: buybitcoinworldwide.com As the graph shows,
despite some deflections during certain periods, the model still
seems to be close. Currently, the chart shows a negative
deflection. Now, there is another, related indicator of relevance
here. The Stock-to-Flow deflection. This metric highlights whether
an asset is undervalued or otherwise in terms of its S2F value.
Related Reading | On-Chain Expert Predicts $162K Bitcoin Peak This
Cycle The BTC S2F deflection is calculated by taking the ratio
between the current price and the S2F value. When the ratio is more
than 1, it means BTC is overvalued, while if it’s less than 1, the
crypto is said to be undervalued. Below is a chart that shows the
current trend in the BTC S2F deflection value: The BTC S2F
deflection ratio is much less than 1 right now | Source: glassnode
As the graph shows, there is a trend line that Bitcoin has touched
in the past, soon after which the price has jumped up. It seems
like the crypto has once again made a touch on this line, and if
past pattern follows, the price might move up. BTC Price At the
time of writing, Bitcoin’s price is around $38k, up 2% in the last
7 days. Over the past month, the coin has accumulated 8% in gains.
Here is a chart showing the trend in the value of the
cryptocurrency over the last 6 months: BTC seems to be once again
moving downwards | Source: BTCUSD on TradingView After a relieving
period of sharp uptrend where Bitcoin reached $42k, the coin is
once again falling down. As the S2F deflection trend line shows,
it’s possible the price might shoot back up. However, that’s only
given the pattern indeed holds. Related Reading | “The Death Of
China’s Bitcoin Mining Industry,” 7 Takeaways From The Article
Also, something to note here is that even if the pattern holds, the
price might not immediately go up. As the S2F deflection chart
shows, BTC touched the trend line twice in 2017 before shooting
back up.
Graph Token (COIN:GRTUSD)
Historical Stock Chart
From Jul 2024 to Aug 2024
Graph Token (COIN:GRTUSD)
Historical Stock Chart
From Aug 2023 to Aug 2024