KEY POINTS

  • Bitcoin reaches $12,000 for the first time in 12 months
  • Numerous sell signals caused it to crash to $10,600 and it is now trading at $11,000
  • The creator of Stock-to-Flow model predicts the benchmark cryptocurrency will reach $100,000 on this cycle

As Bitcoin climbed to $12,000 on Sunday, Aug. 2, PlanB, the creator of the Stock-to-Flow (S2F) model, believes the benchmark cryptocurrency could reach $100,000 "on schedule".

"I can't make a chart for you now (at sea), but S2F model perfectly on track," PlanB tweeted.

The S2F model predicts the future price of Bitcoin based on its future supply. Using gold as the benchmark of how a scarce commodity increases in value over time, PlanB’s model predicts Bitcoin will hit $30,000 by December 2020. The chart also suggests BTC will hit  $55,000 by 2021, and $100,000 before the next Bitcoin halving.

In his updated analysis called Stock-to-Flow Cross (S2FX) model, PlanB thinks Bitcoin’s ceiling price for the third halving cycle is $288,000. He also promised to throw and disregard his analysis altogether if the prediction fails. 

On June 26, the analyst said a 30% increase in one month will enable Bitcoin to reach $12,000. On the day, the currency was priced at $9,130. After 30 days, Bitcoin blasted through $10,000 and $10,500 in 24 hours to reach $11,412, a 26% increase from June 26. Bitcoin reached $12,000 Sunday, seven days later.

Bitcoin on Sunday was a public display of the coin’s extreme volatility. While weak, it was clear the bulls were ready to take $12,000. It finally broke past $12,000 around 8:00 p.m. EDT but a flash crash soon followed to $10,600 after numerous sell calls were triggered at $12,100. 

Bitcoin closed July 2020 at $11,320, the second highest monthly close in the coin’s existence. It closed shy of $11,500 in the weekly closing. 

Currently Bitcoin is trading at the $11,195 range. Support should be strong at $11,000 but anything below will lead to a revisit to low $10,000 levels. Many analysts are bullish on Bitcoin at the moment. Cryptocurrency and network economics-focused firm Cane Island Digital said the lowest price going forward for Bitcoin now is $9,706

But analyst Josh Rager warned that a pullback might happen soon, citing historical data. “There were at least six pullbacks of 30 percent plus or more last bull market uptrend,” he said on Twitter.

The mid-July hack of celebrity Twitter accounts sought to get people to send Bitcoin with a promise of doubling their money The mid-July hack of celebrity Twitter accounts sought to get people to send Bitcoin with a promise of doubling their money Photo: AFP / INA FASSBENDER