The price of bitcoin is less than a few hundred dollars away from the forecast model made more than three months ago.
The forecast was made by pseudonymous Dutch analyst PlanB, who predicted in June that the cryptocurrency would hit $43,000 by the end of September. At the time of writing, bitcoin is trading slightly above $43,150.
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PlanB has gained a devoted following on social media, gaining over half a million followers on Twitter in 2021 alone, with a follower recent description Their stock-to-flow (S2F) model is “surprisingly accurate.”
This model assumes that bitcoin’s inherent scarcity – only 21 million coins will ever exist – coupled with its dwindling supply, will keep its value increasing over the long term.
S2F divides the supply (stock) of bitcoin with its output (flow) – the annual output of bitcoin halved roughly every four years – to determine when a price rally and peak can be expected.
Bitcoin hit a new all-time high of $64,000 in mid-April, although this was not the peak of the current bull run as calculated by PlanB.
There are several versions of their S2F model, all of which place the top six of this market cycle.
PlanB posted its “worst case scenario” for the cryptocurrency after bitcoin crashed between April and July, which saw it briefly fall below $30,000.
Bitcoin was below $34,000 at the time of prediction, although PlanB claimed it would reach $47,000 by the end of August before falling to $43,000 in late September. Both predictions were less than a third of a percent.
According to his forecast, bitcoin will return to its all-time high of $64,000 by the end of next month, before reaching $98,000 in November. It will eventually reach above $100,000 in December, according to the analyst, who predicts it will end 2021 at $135,000 — more than three times today’s price.
September has traditionally been a bad month for bitcoin, with price volatility averaging a 7% loss since 2011. The latest drop can be attributed to a variety of factors, including China’s crypto crackdown and El Salvador’s volatile roll out of its pioneering bitcoin legislation.
Any number of external factors are able to throw off a carefully calculated prediction model, as positive and negative news can create chaos in such a nascent market.
PlanB said, “All these predictions can be destroyed by the Black Swan event, such as the bitcoin ban, the covid escalation, the war with China, etc.” Granthshala earlier this month.
“ETF approval or El Salvador success spread or favorable legislation could be the trigger event for the next phase. And of course, a complete lack of sellers at one point – in my opinion we are getting to that point in a few months “
Credit: www.independent.co.uk /