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Bitcoin Likely Bottomed At $3,150, Could Rally To $10K By December 2019

April 22, 2019 ,

Has Bitcoin (BTC) bottomed? This is the question that has pained crypto investors since BTC plummeted to $3,150 in the middle of December.

While some, especially those subscribed to the Hyperwave theory, claim that cryptocurrencies are poised to head lower, a leading analytics researcher claims that if historical trends are followed, the bears have already bit the dust.

Related Reading: Bitcoin May Have Bottomed, But Crypto Could Still See A “Black Swan” Event

Bitcoin Might Just Have Bottomed

In a recent Twitter post, PlanB, a pseudonymous industry analyst that hails from the world of traditional finance, recently expressed that Bitcoin may just have bottomed. To back this call, he refers to Bitcoin’s stock-to-flow (SF) ratio, which, for the uninitiated, weighs an asset’s above ground supply (stock) and issuance rate (flow), and how it relates to BTC.

As reported by NewsBTC previously, PlanB determined that the market capitalization of commodities, especially silver and gold, can be predicted by plotting their respective SF ratios on a logarithmic graph. He recently discovered that Bitcoin, defined as a deflationary commodity by some entities, fits this model too.

And thus, he created the Bitcoin Stock-to-Flow Multiple (BSFM), which puts the actual value of BTC over what the SF model predicts it should be.

Per PlanB, the BSFM indicates tops and bottoms in markets. He writes that historically, in 2011, 2012, and 2015, cryptocurrencies found a bottom when the multiple reached 0.5, meaning that BTC was undervalued by 50% of its stock-to-flow model. And guess what? The BSFM entered the 0.5 range in late-2018, which was when BTC fell to $3,150 in what many deemed the final capitulation event.

Indeed, in a recent episode of Stephen Livera’s podcast, PlanB remarked that in December, his model predicted that Bitcoin’s “fair value” was approximately $6,200, but that BTC was actually trading at $3,150 on spot markets. That isn’t 50% to a tee, but you get the point.

The Pre-Halving Bitcoin Rally

As you well know, BTC is currently trading at $5,200, meaning that according to PlanB’s thesis, it is currently still undervalued, despite early-April’s jump. But, as market analyst GravityWave recently hinted at, the “fair value” derived from the SF model has historically pulled BTC higher along with it, save for nuances like December’s capitulation and 2017’s jaw-dropping rally past $10,000.

Thus, if the value of Bitcoin matches the SF model, each BTC would be valued at $10,750 by the time of the block reward reduction, slated to occur in early-May of 2020. And by the end of the year, BTC should be valued in the $9,000s if PlanB’s model is followed. But is this possible?

According to an array of prominent traders, BTC reaching quintuple digits by the year’s end is entirely possible. In a recent episode of Ivan On Tech’s “Good Morning Crypto,” a daily segment hosted by a Dutch blockchain programmer, Russian trader Anatoly Radchenko was about whether or not he agrees with the cheery sentiment put forth by Tom Lee and Mike Novogratz, who claimed that BTC could see $10,000.

Radchenko agreed, claiming that while BTC will likely take at least three months to rally to $7,000, by New Year’s Eve 2019, the cryptocurrency could see $10,000.

The post Bitcoin Likely Bottomed At $3,150, Could Rally To $10K By December 2019 appeared first on NewsBTC.

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http://bit.ly/2FUbkJa April 22, 2019 at 09:33AM @BruceDayne, @Nick Chong April 22, 2019 at 12:40PM