Bitcoin boom ahead? PlanB sees a price of $400,000!

Bitcoin boom ahead? PlanB sees a price of $400,000!

Analyst PlanB is convinced that the Bitcoin price could soon reach the $400,000 mark. He is known for his stock-to-flow model, which compares the scarcity of Bitcoin to that of gold, silver and real estate. Despite a certain decline in the popularity of his model, he continues to make bold predictions about the price development of Bitcoin, such as Newsbit reported.

In a recent YouTube video, PlanB explains that the bull market for Bitcoin is not over yet. He refers to the Relative Strength Index (RSI), an indicator that is used to measure the strength of a price movement. Currently, the RSI is at 66 points, which is the average of 65 points. PlanB believes that the RSI will reach at least 80 this cycle, which would equate to a potential 290% increase in Bitcoin's value.

Market analysis and future developments

PlanB is confident that Bitcoin could trade with an RSI above 80 in the coming months, similar to the previous major bull markets of 2021, 2017 and 2013. High RSI numbers could be associated with monthly returns of over 40%. With a current Bitcoin price of $100,000, this could in fact result in the value tripling to $400,000.

A central element of PlanB's predictions is the stock-to-flow model, which serves as a tool for predicting the price of Bitcoin. It estimates price levels based on the amount of Bitcoins available and the amount mined annually. How Bitcoin Magazine explained, Bitcoin is considered a scarce commodity, similar to gold and silver, which maintain their value due to limited availability.

Mechanisms of the Stock-to-Flow Model

As part of the S2F model, Bitcoin's current price is plotted against the stock-to-flow line on a chart, showing how well historical prices match the model's predictions. As the amount of Bitcoin mined decreases over time, the S2F ratio increases, indicating future price increases. Each Bitcoin halving event, which occurs every 210,000 blocks or roughly every four years, reduces mining rewards and increases scarcity.

Overall, PlanB's predictions and the mechanics of the stock-to-flow model provide valuable insights for investors looking to anticipate Bitcoin's future price movements. The next significant price prediction of the S2F model is for December 31, 2024 at $306,984. If PlanB's assessment proves correct, Bitcoin could play a central role in the future global monetary system.