Bitcoin: PlanB model mentions cycle towards $500,000

The Bitcoin market is rekindling the debate about its growth cycles. Indeed, analyst PlanB estimates that the price of Bitcoin could reach an average of $500,000 during the current cycle. This estimate is based on an update of his Stock-to-Flow (S2F) model, often used to analyze BTC shortages. So this new projection is attracting the attention of crypto investors and market analysts.

Bitcoin Price Could Reach $500,000 According to Stock-to-Flow Model

While Bitcoin was just down 2% on Sunday night, PlanB recently updated its Stock-to-Flow model, which is used to analyze Bitcoin’s scarcity and the evolution of its market cycle. According to this analysis, Bitcoin’s price could average close to $500,000 during the post-halving period in 2024.

First, this model is based on the relationship between the available supply and the annual production of new BTC. Each halving reduces the creation of bitcoins, which gradually reduces the market supply. Historically, these events have often preceded significant increases in BTC prices.

The chart published by PlanB also shows that the price of Bitcoin often follows a trajectory close to certain long-term indicators. Notably observed are the 200-week moving average and realized price, two benchmarks used by many analysts to assess market trends.

According to this analysis, several elements appear in the graph:

• BTC price generally stays above the 200-week moving average during bullish cycles;
• Periods of euphoria often correspond to a high RSI, which signals strong market activity;
• The Stock-to-Flow model estimates an average of around $500,000 for the 2024-2028 cycle.

So this graph illustrates the progress of Bitcoin in incremental steps after each halving. However, these projections remain statistical models. The actual evolution of the Bitcoin price will also depend on market demand and macroeconomic conditions.

What factors could affect the price of Bitcoin in this cycle?

This new estimate is fueling discussions about Bitcoin cycles and the evolution of the crypto market. Many investors actually follow these models to better understand long-term trends.

Additionally, several factors could influence Bitcoin’s price trajectory in the coming years:

• gradually reducing supply after each halving;
• increasing institutional demand for bitcoins.

However, it is important to note that statistical models do not guarantee market development. Bitcoin price remains sensitive to several external elements.

For example, macroeconomic conditions, global liquidity and regulatory decisions can change market dynamics. Additionally, BTC volatility may cause temporary deviations from theoretical projections.

In this context, investors are keeping a close eye on on-chain data, flows to exchanges and movements of large wallets.

The Bitcoin cycle is still evolving

Currently, the Bitcoin market continues to evolve in a cycle that remains incomplete. Projections based on the Stock-to-Flow model therefore need to be monitored over a longer period.

However, some indicators suggest that the market could still develop in the coming years. At the same time, volatility remains high and the crypto market will again be dominated by extreme fear, which reflects the current uncertainty of investors. Further movements in the price of Bitcoin will thus make it possible to measure whether the estimates presented by PlanB really approximate the trajectory of BTC.

DISCLAIMER OF LIABILITY

The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Before making any investment decision, do your own research.