๐ Analyst Announces Bull Run Start, Cites Stock-to-Flow Strategy ๐
๐ PlanB's Bull Run Prediction: Analyst PlanB predicts the start of a bull run based on his Stock-to-Flow research, signaling the end of an accumulation phase and the onset of extreme price movements characterized by rapid pumps and sharp drops.
๐ What is Stock-to-Flow: Stock-to-Flow (S2F) predicts Bitcoin's value based on scarcity derived from its production rate. PlanB, an anonymous investor, adapted the model from precious metals analysis to forecast Bitcoin's price.
๐ How Stock-to-Flow Works: SF ratio is calculated as the inverse of supply growth, reflecting scarcity. Bitcoin's current SF ratio indicates a scarcity trend, especially with an upcoming halving event that reduces block rewards.
๐ Stock-to-Flow Deflection Indicator: Traders use the Stock-to-Flow Deflection to gauge Bitcoin's value relative to its predicted value by the SF model. A deflection below one suggests undervaluation, while above one indicates overvaluation.
๐ค Why Stock-to-Flow is Criticized: Critics like Nico Cordeiro question the model's accuracy and applicability, citing problems with linear regression and misconceptions about scarcity's impact on price. Ethereum's Vitalik Buterin also criticizes models that promote false certainty.
๐ก Stock-to-Flow Potential: Despite criticism, Stock-to-Flow has successfully predicted Bitcoin's price growth. PlanB and followers believe Bitcoin's value will continue to rise due to scarcity and undervaluation, although the model's relevance may diminish over time. ๐
