The popular Stock-to-Flow (S2F) model and onchain indicators suggest the correction is over and the bitcoin price will rise towards $85,000 by the end of the year. The observations were shared by DecenTrader analysts.
Market update from @PositiveCrypto : https://t.co/o3l4Wsz5Wq
— Decentrader (@decentrader) June 11, 2021
Experts have analysed the dynamics of a number of onchain indicators and found similarities with December 2018 and March 2020, when the stage was set for a trend change to a rising one.
The price of the first cryptocurrency remains in a corridor between the 200-day moving average and the $32,000 level. According to analysts, there is still uncertainty in the market after May's collapse due to fears of increased regulatory pressure from the US authorities.
The Active Addresses Sentiment Indicator pointed to excessive selling and a possible reversal, experts said. The metric determines overbought/oversold prices relative to user activity.
The analysts cited a chart which shows the return of the 28-day moving average of the digital gold price change to the corridor of the same indicator based on the dynamics of active bitcoin addresses. Previously, this situation served as a signal of growth in the following weeks.
The SOPR (Spent Outlet Profitability Ratio) indicator has seen similar price increases. The last few days have been dominated by coin sales at a profit rather than at a loss, as was the case during May.
DecenTrader expressed confidence that within a few months the price will return to the line of its expected trajectory dictated by the S2F model. In other words, digital gold will reach a new record high of $85,000 by the end of the year.
"This time buyers may not have the same old rally. Nothing has fundamentally changed. The model works, it's just that there is a negative news environment around bitcoin," the analysts explained.
Their chart shows the divergence between the current price and the S2F forecasted price of the first cryptocurrency. The orange arrows highlight four situations in history where this divergence has reached current values.
"$288,000 remains a realistic benchmark. I would be very surprised if the price does not return to the trend line," the PlanB model creator wrote.
Analyst Michael van de Poppe pointed out that in the S2F model the "undervaluation" of bitcoin has reached its highest level in a decade. He did not rule out that the "crowd" would ignore this and wait for a drop to $20,000.
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