Bitcoin releases third monthly red candle with stock-flow price pattern echoing early 2019

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Bitcoin (BTC) closed its third consecutive red monthly candle this week as a popular analyst compared BTC price action to January 2019.

In a tweet Thursday, PlanB said BTC / USD is now furthest from its stock-flow pattern estimates for more than two years.

Make or break the stock-to-flow

After May’s huge surrender, Bitcoin price action failed to regain lost ground, remaining around 50% below recent all-time highs.

As a result, price patterns are seriously put to the test even as chain indicators start to turn bullish again.

In the case of stock-to-flow, which calls for an average price of at least $ 100,000 this halving cycle, the situation becomes precarious.

Famous for its accuracy, the model has taken into account every bounce in BTC price action since its inception. Now, however, the spot price is approaching the limits of what it can accommodate.

Even for me, it’s still a little uncomfortable when the price of bitcoin is in the lower bound of the stock-flow model, PlanB admitted last week.

Nonetheless, given the changes that can occur in Bitcoin in a matter of months, there is little reason to fear that the stock-to-flow will be invalidated.

June closing price $ 35,037 … as far as the S2F model in January 2019, PlanB added on Thursday, implying that it continues to work as usual for the models’ relationship to price.

The next 6 months will be decisive for S2F (again).

The last time Bitcoin was this far from stock-to-flow, which predicts a price of $ 77,760 for Thursday, BTC / USD had just emerged from the bear market trough of 2018, where it fell to just 3. $ 100.

Bitcoin stock-to-flow model as of July 1. Source: A PlanB / TwitterA correction pending?

As Cointelegraph reported, price catching up with on-chain indicators has become something of a defining story in recent weeks.

Related: Coincidence? Bitcoin saw its ups and downs on “turnaround Tuesdays” in June

Criteria such as the popular Puell Multiple suggest that a floor price is on the cards, consistent with historical precedent, with an implied rebound to follow.

still seems to follow -25% difficulty #bitcoin adjust for Friday. https://t.co/TuqYAFU1wU unassigned bitcoin, tick-tock next block. mining profitability pic.twitter.com/yONPd88xJq

Adam Back (@ adam3us) June 29, 2021

The ongoing relocation of mining power out of China should also become less of a concern when completed. Mining difficulty is expected to see its sharpest drop this weekend due to the upheaval, which will quickly increase miners’ profits and attract new mining power.

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