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bitcoin is in your way to try again the $69,000 price level again in the early hours of Monday, October 28, as the bulls look to start the week on a positive note. A notable break above $69,000 would set the stage for a sustained rally in the coming months.
Talking about sustained recoveryThe bitcoin Stock-to-Flow model points to an interesting trend in bitcoin's long-term prospects. Notably, crypto analyst Plan B referenced the Stock-to-Flow model to suggest that btc is ready for the next transition phase.
btc is ready to transition to the next phase
The bitcoin Stock-to-Flow (S2F) model is attracting attention as it indicates that bitcoin may be preparing for a new transition phase that solidify its price above $100,000. The S2F model, originally developed for commodities such as gold and silver, measures the existing supply of an asset against the rate of new units entering the market. In the case of btc, the S2F model calculates scarcity taking into account its fixed supply of 21 million btc, along with block reward halvings that reduce new supply every four years.
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Each halving event decreases the issuance rate, creating increasing scarcity that the model correlates with price growth. According to the S2F graph x.com/100trillionUSD/status/1850592808513495071″ rel=”nofollow”>shared by Plan BThese halvings have led to price increases in the following months, and the S2F model accurately forecasts bitcoin transitions to new price levels.
bitcoin was last halved in April 2024, causing the block reward to drop from 6.25 btc to 3.125 btc. According to the S2F chart, past bitcoin halvings have always initiated the price transition to a new phase. The 2020 halving, for example, began the transition to a new phase above $10,000 that culminated with btc reaching the previous all-time high of around $66,000.
Now that six months have passed since the April 2024 halving, the effects of the halving are starting to be factored into bitcoin supply and demand. As such, bitcoin is seeking bitcoin-demand-remains-strong-key-metrics-confirm-bullish-outlook/” rel=”nofollow”>ideal for a phase transition above $100,000.
What does this mean for the price of bitcoin?
As past phase transitions have played out, a phase transition above $100,000 would solidify bitcoin's price above this level. Since the $100,000 price level now serves as the price floor, this would give the bitcoin price the support to continue rising in the coming months.
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Previous phase transitions have always led to a new peak before another halving. The expected peak for this phase is just below $1,000,000. If past trends hold, bitcoin price could reach this impressive milestone before the next halving, which is expected to take place in 2028.
At the time of writing, bitcoin is trading at $68,340.
Featured image created with Dall.E, chart from Tradingview.com
