When it comes to predicting Bitcoin’s bearish and bullish cycles versus its increasing scarcity, the well-known prediction model has historically been surprisingly accurate.
Bitcoin may reach $100,000 by the end of this year after reaching a fresh high of $67,000 last week.
The second leg of what seemed to be a protracted bull market, according to PlanB, the developer of the well-known Bitcoin Stock-to-Flow (S2F) model, was the price pullback from the $60,000 level.
The anonymous analyst supported their claim by citing S2F, which predicts that Bitcoin will continue to rise and reach $100,000 to $135,000 by the end of the year.
Due to the halving, which occurs every four years and decreases BTC’s issuance rate by half against its 21 million supply cap, the price projection model predicts that Bitcoin’s value will increase until it reaches at least $288,000 per token.
In 2012, 2016, and 2020, respectively, there have been three halves of the value of Bitcoin.
Each occurrence resulted in a 50% reduction in new cryptocurrency supply, which was followed by considerable price hikes for bitcoin. As an illustration, the first two price halvings caused the price of BTC to increase by over 10,000% and 2,960%, accordingly.
The price increased by 667.50% during the third halving, going from $8,787 to a maximum of $66,999. According to the chart below, S2F has been fairly correct in projecting Bitcoin’s price trajectory so far, giving bulls greater optimism that the cryptocurrency will reach the $100,000 price point during its post-halving bounce.
According to a prediction made by PlanB earlier this year, Bitcoin will reach $98,000 by November and $135,000 by December. The prediction also stated that the only thing standing in the way of the cryptocurrency reaching a six-digit value is a black swan event that the market hasn’t witnessed in the last ten years.
A Subsequent 80% Crash
Bitcoin may experience significant market corrections in the future, despite the lofty price expectations. Based on the same S2F model, PlanB believes that the next crash might erase at least 80% of the market capitalization of Bitcoin.
However, not everyone believes the upcoming correction will be as significant as the past ones. The next Bitcoin price decline will be less than 80%, according to Dan Morehead, CEO of Pantera Capital, who made this prediction in mid-October. He cited a persistent decline in selling sentiment following each cycle of price halving.
Following a 53% increase in value thus far in October, Bitcoin reached a new record high last week at almost $67,000. The $60,000 support level was retested nevertheless since the new highs led traders to take their profits.