Bitcoin (BTC), which hit a new high at $ 67,000 last week, opened up the possibility of hitting $ 100,000 by the end of this year.
PlanB, creator of the popular Bitcoin Stock-to-Flow (S2F) model, called the Bitcoin price pullback from the $ 60,000 mark as the “second phase” of what looked like a long-term bull market.
#bitcoin Bull market, 2nd stage has started pic.twitter.com/N9H2QF7SDe
– PlanB (@ 100 trillion USD) October 26, 2021
The analyst quoted S2F, which assumes Bitcoin will continue to peak, reaching between $ 100,000 and $ 135,000 by the end of the year.
The price projection model insists that the value of Bitcoin will continue to rise to at least $ 288,000 per token due to the “halving”., an event that occurs every four years that cuts the issuance rate of BTC in half from its supply limit of 21 million.
In particular, Bitcoin has seen three halves so far: 2012, 2016 and 2020.
Each event reduced the new delivery rate of the cryptocurrency by 50%, followed by significant price increases for BTC. For example, the first two halves saw the price of BTC rise more than 10,000% and 2,960% respectively.
The third halving increased the price from $ 8,787 to $ 66,999, an increase of 667.50%. So far, S2F has been very accurate in predicting Bitcoin’s price action, as shown in the chart below, which leaves the bulls with greater hopes that Bitcoin’s price will exceed $ 100,000 after the halving.
PlanB noted earlier this year that Bitcoin will hit $ 98,000 in November and $ 135,000 in December, the past decade.
An 80% decrease
Despite the high price forecasts, Bitcoin can still see major corrections in the future. PlanB believes the next drop could wipe out at least 80% of Bitcoin’s market cap, based on the same S2F model.
“Everyone is waiting for the super cycle or ‘hyperbitcoinization’ to begin right now and they don’t have a big crash after the next all-time highs”the analyst told the Unchained podcast, adding.
“As much as I hope it’s true that we won’t see this clash again, I think we will. […] I think we will be driven by greed now and fear later and we will see less than 80% even after we hit a few hundred thousand dollars. “
But not everyone thinks the next correction will be as dramatic as the previous ones. Dan Morehead, CEO of Pantera Capital, said in mid-October that the next Bitcoin price drop will be less than 80%, citing a steady decline in sales sentiment after each halving cycle.
Last week, Bitcoin hit a new high of around $ 67,000 in October after a 53% rally so far. But the new highs sparked profit-taking among traders, leading to further testing of the $ 60,000 support level.
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