As a seasoned crypto investor who has navigated through the digital wild west for over a decade now, I find myself both exhilarated and cautious about the recent Bitcoin price surge above $76,000. The stock-to-flow model’s projection of a $500,000 target within the next four-year cycle is nothing short of tantalizing, especially given my past experiences with this unpredictable market. However, I remember all too well the infamous $20,000 peak in 2017, followed by a prolonged bear market that tested even the most ardent Bitcoin believers’ resolve.
The price of Bitcoin climbed above $76,000 after Donald Trump’s triumph in the U.S. presidential election on November 5th.
According to Bitcoin (BTC) analyst PlanB’s stock-to-flow analysis, which uses historical patterns and data, the estimated price of BTC could reach approximately $500,000 over the next four-year cycle.
According to PlanB’s analysis, the suggestion made by Trump to establish a national Bitcoin (BTC) reserve might significantly boost demand. This could potentially lead to approximately 200,000 additional Bitcoins being purchased annually due to increased buying pressure.
Based on historical trends and the stock-to-flow model, the analyst predicts significant price rises in the future.
Stock-to-flow model price targets
According to the stock-to-flow model, an economic approach that estimates Bitcoin’s worth by considering its scarce nature and planned reduction in supply (halvings), it predicts significant price increases following every halving event.
The analyst predicts that Bitcoin’s price might hit $500,000 during this market cycle, but he acknowledges that there could be significant fluctuations, ranging from as low as $250,000 to as high as $1,000,000 for each Bitcoin.
Institutional demand and government interest
Under the upcoming Trump administration, there’s anticipation for a surge in Bitcoin‘s institutional development, as Senator Cynthia Lummis advocates for establishing a Bitcoin reserve mirroring the gold reserve.
The new government might likewise release an executive decree to set aside federal resources for purchasing Bitcoin, which could pave the way for a fresh benchmark in reserve standards.
PlanB also drew attention to companies such as MicroStrategy, who have declared significant Bitcoin buying strategies, with their CEO, Michael Saylor, pledging to procure approximately 200,000 BTC annually for the subsequent three years.
“Spoof city” sours BTC gains
On November 8th, well-known trader Skew expressed worry about the widespread use of an underhanded trading strategy known as “spoofing” in cryptocurrency markets. Although this practice is prohibited in traditional marketplaces, it’s quite prevalent in the crypto world.
It’s believed that a common strategy used during the recent $77,270 Bitcoin peak on Bitstamp entails placing substantial amounts of liquidity at specific price levels. These pre-set prices are subsequently adjusted or completely withdrawn following market responses.
Many analysts and investors share similar apprehensions, pointing out that Bitcoin’s usual steep climb is absent, even with substantial inflows and an anticipated possibility of a long position squeeze.
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2024-11-09 16:37