It looks like the Bitcoin bulls are still at work as there are high levels of Bitcoin that are being bought in history. This week, the stock-to-flow deflection has hit a level that may lead to a price surge.
It will experience a price surge on the condition that a classic price model repeats historical behaviour and buyers continue supporting it.
According to analyst William Clemente on Tuesday via Twitter, BTC/USD is bullish and has made the stock-to-flow to induce a bull trigger. This comes unexpectedly as most of the time, BTC lingers below the stock-to-flow projections daily.
Stock-to-flow deflection is how far bitcoins relative price is from the estimate. At the moment, the deflection is five times more than it has ever been in history.
Historically, when bitcoin reaches its lowest deflection boundary, it goes on a price tear.
Even though PlanB was the original creator of the Stock-to-flow model, the recent price dip makes the company doubt it will reach its end-year target of $135,000. According to a report done by Cointelegraph, that would happen in the worst-case scenario according to PlanB.
Many factors may lead to the BTC transfers spike. Investor activity may be the main factor that sucks up the flow in the stock-to-flow model. Bitcoin bulls may be the ones buying the BTC so that they can alter the price.
According to CryptoQuant, an on-chain analytics firm, an unknown market force is buying high BTC volumes, though that is not happening in exchanges.
If any big names were in the spotlight for buying, the bears would be shaking. The current price movement may not be long-term, though.
It is better to trade with caution with the current market condition as BTC/USD may consolidate soon. We are headed for long leverage.
Photo by Chris Liverani on Unsplash
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