Trend Line Touch Could Send Bitcoin On A Tear

News BTC

Popular Bitcoin model Stock-to-Flow (S2F) shows BTC has touched a trend line that has historically sent the crypto flying.

Bitcoin Touches S2F Deflection Trend Line

As pointed out by a crypto analyst on Twitter, BTC seems to have just touched a lower S2F deflection trend line.

The S2F or Stock-to-flow Bitcoin model helps in predicting the price of BTC. The method has proved to be remarkably accurate so far, besides a few points of deviation.

How To Get Free Crypto  
5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

S2F model is based on the ratio between the stock (supply) and the flow (annual production). The model can be applied to any asset, not just BTC. A higher value of the indicator means the commodity is more scarce.

Here is how the latest S2F chart for Bitcoin looks like:

Get 110 USDT Futures Bonus for FREE!
The BTC S2F chart seems have a negative deflection at the moment | Source: buybitcoinworldwide.com

As the graph shows, despite some deflections during certain periods, the model still seems to be close. Currently, the chart shows a negative deflection.

Now, there is another, related indicator of relevance here. The Stock-to-Flow deflection. This metric highlights whether an asset is undervalued or otherwise in terms of its S2F value.

Related Reading | On-Chain Expert Predicts $162K Bitcoin Peak This Cycle

The BTC S2F deflection is calculated by taking the ratio between the current price and the S2F value. When the ratio is more than 1, it means BTC is overvalued, while if it’s less than 1, the crypto is said to be undervalued.

Coinbase Banner  

Below is a chart that shows the current trend in the BTC S2F deflection value:

The BTC S2F deflection ratio is much less than 1 right now | Source: glassnode

As the graph shows, there is a trend line that Bitcoin has touched in the past, soon after which the price has jumped up.

It seems like the crypto has once again made a touch on this line, and if past pattern follows, the price might move up.

BTC Price

At the time of writing, Bitcoin’s price is around $38k, up 2% in the last 7 days. Over the past month, the coin has accumulated 8% in gains.

Here is a chart showing the trend in the value of the cryptocurrency over the last 6 months:

BTC seems to be once again moving downwards | Source: BTCUSD on TradingView

After a relieving period of sharp uptrend where Bitcoin reached $42k, the coin is once again falling down. As the S2F deflection trend line shows, it’s possible the price might shoot back up. However, that’s only given the pattern indeed holds.

FreeBitcoin Banner  

Related Reading | “The Death Of China’s Bitcoin Mining Industry,” 7 Takeaways From The Article

Also, something to note here is that even if the pattern holds, the price might not immediately go up. As the S2F deflection chart shows, BTC touched the trend line twice in 2017 before shooting back up.

Go to Source
Author: Hououin Kyouma


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.