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Bitcoin is upside down way to retest 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 pave the way for a sustained rally in the coming months.
Talk about continued rallythe Bitcoin Stock-to-Flow model points to an interesting trend in the long-term prospects for Bitcoin. Crypto analyst Plan B mainly referred to the Stock-to-Flow model to suggest that BTC is ready for the next phase transition.
BTC is ready for the next phase transition
The Bitcoin Stock-to-Flow (S2F) model is drawing attention because it indicates that Bitcoin may be gearing up for a new phase transition that to increase 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 number of new units entering the market. In the case of BTC, the S2F model calculates scarcity by taking into account the fixed supply of 21 million BTC, along with the halving of block rewards that reduce new supply every four years.
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Each halving event reduces the issuance rate, creating increasing scarcity that the model predicts correlates with price growth. According to the S2F chart shared by Plan Bthese halvings have led to price increases in the following months, with the S2F model accurately predicting Bitcoin’s transitions to new price levels.
Bitcoin last halved in April 2024, dropping the block reward from 6.25 BTC to 3.125 BTC. According to the S2F chart, previous halvings of Bitcoin have always taken the price transition to a new phase. For example, the 2020 halving set in motion the transition to a new phase above $10,000, which culminated in it hitting the previous all-time high of around $66,000.
Now that the April 2024 halving is six months behind us, the effects of the halving are starting to be factored into Bitcoin supply and demand. As such, Bitcoin is on the hunt prime for a phase transition above $100,000.
What does this mean for the Bitcoin price?
With previous phase transitions having played out, a phase transition above $100,000 would push the Bitcoin price above this level. With the $100,000 price level serving as a price floor, this would give the Bitcoin price the support to continue rising in the following months.
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Previous phase transitions have always led to a new peak before a new halving. The expected peak for this phase is just under $1,000,000. If past trends hold true, Bitcoin price could reach this impressive milestone ahead of 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
