In a recent article, The End of The Bitcoin Bull Market As We Know It, I projected market expectations for bitcoin’s price into the future and compared the results to historical indicators of market cycle peaks.
Guess what?
If those expectations come true, bitcoin's bull market will peak this month at approximately $90,000, give or take $10-15k.
Yes, that means the market cycle peak will come this month and possibly not break $100,000.
(Early May works, too.)
That may sound like poppycock because bitcoin recently broke out of a bullish trading pattern in the middle of a parabolic run after completing its record-tying sixth straight month of higher prices. The last two times it did that, its price doubled over less than a month.
Altcoins have started to run hard and everybody says institutional money's pouring into the market. While the price has gone sideways for the last month or so, the experts say that's a healthy consolidation before the next leg up.
That's my point. Everything's moving too hard, too fast, and if that continues, we will soon see all the signals of a market cycle peak. I lay out the argument in the article linked above.
Mark, you’re nuts. Stock-to-Flow says there’s no way that can happen
Yes, Stock-to-Flow predicts bitcoin’s price will reach $82,000 in June and stay above $100,000 from July to eternity.
Look at this chart, courtesy of LookIntoBitcoin:
Do you see the squiggly line at the bottom? That shows you how much bitcoin’s price has strayed from Stock-to-Flow’s predictions over time.
When the squiggly line hits the flat black line, that means bitcoin's price is aligned with Stock-to-Flow. As the squiggly line moves away from the flat black line, that means bitcoin’s price is deviating from Stock-to-Flow.
You can see it more clearly on this chart from Glassnode:
Bitcoin’s price has gone 4x higher and 70% lower than Stock-to-Flow for weeks at a time, and sometimes spends months at prices +50% below and +2x higher than the model predicts.
The new version of Stock-to-Flow, S2Fx, offers a similarly wide range of prices that fit the model.
We’ve done it before
There’s no reason bitcoin's price can’t zoom to $90,000, hit a market cycle peak, crash to $30,000, then go up to $100,000 later this year.
Maybe instead of a bull market that looks like 2016–2017, we get a bull market that’s more like 2013: a market cycle peak in April to cap off a long bull run, followed by a massive crash, then a few months of Silicon Valley FOMO that sent prices even higher.
Both Stock-to-Flow and its updated version, S2Fx, say we can do that.
There’s also no reason bitcoin's price can’t chill around $40–60k for a few months — or even crash down to the $20,000s from here. We’ve seen bitcoin make those types of moves in the middle of raging bull markets, all within the range of prices you get with Stock-to-Flow and S2Fx.
While that would take a lot of people by surprise, bitcoin's price has dropped 50% or more in each of the past three years and all of those drops fit into Stock-to-Flow, too.
Unless Stock-to-Flow is not very good at predicting bitcoin’s price . . .
Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio.
Originally published on Voice.com.