PlanB’s Stock-to-Flow Bitcoin Model Keeps Getting It Wrong – Is Bitcoin Recovering?

• PlanB's Stock-to-Flow (S2F) model is wildly inaccurate, showing a $125K difference between Bitcoin's actual market value and its predicted price ($180K).
• Investors are worrying about the S2F model's reliability and resort to two other models, the Rainbow Price Chart and Power Law Model, for more reliable predictions.
• Bitcoin seems to be recovering, increasing by 3.81% in the last 24 hours.

PlanB's Stock-to-Flow model, which uses Bitcoin's ($BTC) scarcity to predict its price,has been off the charts in recent years.

The S2F model predicts a $BTC price of $180K, while the asset is currently worth $55K, resulting in a $125K difference between the actual market value and the prediction.

Investors are questioning the model's accuracy and reliability, especially during market crashes and unpredictable conditions.

Let's see why the model falsely sees everyone as Bitcoin millionaires when the asset has recently plunged below $50K.

How Does the S2F Model Predict Bitcoin's Price?The S2F model predicts that $BTC's price will increase as miners bring new Bitcoins to the market slower, decreasing the flow and increasing the price.

The model was fairly accurate until 2021, predicting price movements reliably. However, 2021 was the breaking point, and the model started diverging from the actual Bitcoin value.

While the S2F model was among the most popular $BTC prediction tools, it is becoming outdated and being replaced by other tools.

The $125K deviation from Bitcoin's price and predicted value shows the model's weakness and the market's need for more in-depth analyses.

Rainbow Price Chart & Power Law Model to Replace S2F

The Rainbow Price Chart and the Power Law Model are two predictive tools that could reliably replace S2F:

1. Rainbow Price Chart: Classifies price levels by market sentiment from low' to high'
2. Power Law Model: Uses the relationship between price and time to project $BTC's long-term price using resistance and support levels

The Rainbow Price Chart shows Bitcoin heading toward the lower portion of the chart, signifying a temporary regression. The price is $220K below the upper limit predicted by the chart.

Recently, Bitcoin's price patterns have conformed to the Power Law Model.The asset is within the normal limits ($40K below the expected price).

The differences between the two models show how complicated Bitcoin price prediction is. That's why technical analysts use multiple prediction tools to achieve a more accurate result.

Is Bitcoin Heading Up or Down?

Bitcoin's market cap has increased by 3.89% in the last 24 hours, reaching $1.089T, with a 3.81% price recovery to $54,811.

Based on the Rainbow Price Chart and Power Law Model, Bitcoin is currently in an upward trend that started in 2022. It's unlikely $BTC will crash permanently.

It remains to be seen how $BTC advances in the coming weeks.

The post PlanB's Stock-to-Flow Bitcoin Model Keeps Getting It Wrong - Is Bitcoin Recovering? appeared first on The Tech Report.