A Tale of Two Bitcoin Prices: S2F vs. Time Series Models

The bitcoin price may have retreated from the USD 50K level, but the BTC bulls believe it is just a matter of time before the flagship cryptocurrency is barreling toward its next milestone. There is no shortage of bitcoin price predictions out there, many of which are short-term in nature with a view to the end of the year.

Popular Twitter account and investor PlanB, who is behind the bitcoin stock-to-flow model, has illustrated a fork in the road in which the bitcoin price might pursue one of two paths in the near term. PlanB’s analysis looks out to the 2021 holiday season with a comparison of the widely cited S2F and time series models.

Bulls and Bears

The S2F outlook provides the more bullish outlook and suggests that the bitcoin price will be trading at USD 100K by Dec. 25. This would be a more than doubling in the price of bitcoin’s current level of about USD 47K. Nonetheless, it would not be unheard of.

For example, as Anthony Pompliano of Pomp Investments recently pointed out, in 2017, when bitcoin made its way onto the map of the mainstream, the BTC price soared 100% from USD 10K to USD 20K in a matter of days in what he described as a “blow-off top.” For history to repeat itself would not be out of the question for a volatile asset like bitcoin.

On the other side of the coin, there is the time model based on Trololo. Plan B describes that under this pattern, the bitcoin price will see its value slashed to USD 30K by Christmas. The investment expert says that the “next months will be key.”

#bitcoin stock-to-flow model predicts $100K by Christmas, time model (diminishing returns, lengthening cycles) $30K. Next months will be key. Note that color overlay is on-chain signal (not time to halving), indicating we are between bottom (blue) and top (red), in line with S2F. pic.twitter.com/OS0pAKduq4

— PlanB (@100trillionUSD) August 27, 2021

Bottom Line

One commenter on the Twitter thread pointed out that the time model analysis reflects the fair value price and therefore the price could weave in and around the target. Plan B agreed, explaining that “the bitcoin price can move above and below both models.”

The bottom line, according to Plan B, is that the bitcoin price is now hovering above the time series model. As a result, fans of this more bearish outlook might plan for the BTC price to decline. On the other hand, the BTC price is trading below the S2F, therefore followers of it can expect higher prices.