PlanB Bitcoin Prediction January 2025

Summary

In this video, the 2024 Bitcoin market is analyzed through five key metrics: price trends, RSI, moving average, realized price, and stock-to-flow. Despite a new all-time high of $108,000, the December monthly close of $93,000 was not a record, but the price remains bullish. RSI indicates upward momentum, but has yet to reach extreme levels. The realized price is rising sharply, signaling continued bullish behavior. The stock-to-flow model predicts an average price of $500,000 by 2028, with a potential range of $250,000 to $1 million. Overall, the market shows strong indicators for further growth, though uncertainty remains.

Takeaways

• 😀 Bitcoin reached an all-time high in December 2024, peaking at $108,000, but the monthly close was $93,000, which was slightly lower than the November close of $96,000.
• 😀 Historically, when Bitcoin hits an all-time high, it often leads to more all-time highs in subsequent months, as seen in previous bull markets like 2021, 2017, and 2013.
• 😀 The Relative Strength Index (RSI) for Bitcoin is currently 73, indicating an uptrend, though it has not yet reached the extreme FOMO territory (RSI above 80) that characterizes previous bull markets.
• 😀 The Moving Average (200-week) is at $43,000, which serves as a floor in bear markets but is less relevant in the current bull market, as Bitcoin is trading far above this level.
• 😀 The Realized Price, a measure of the average price of Bitcoin that has moved on-chain, is currently at $71,000, signaling continued bullish momentum.
• 😀 The Realized Price has been rising sharply, a typical sign of a bull market, with past trends showing divergence from the 200-week moving average during such phases.
• 😀 The Stock-to-Flow model predicts an average Bitcoin price of $500,000 by 2028, with a range between $250,000 and $1 million, far higher than other models predicting a top of $200,000 in 2025.
• 😀 The 2024 Bitcoin cycle shows that the Stock-to-Flow model's predictions have historically been slightly off, with 2020 being too low and 2024 slightly too high.
• 😀 The Bitcoin price of $93,000 is significantly above the 200-week moving average, making this indicator less important for current market analysis, but it will become more relevant during future bear markets.
• 😀 The video emphasizes that Bitcoin markets are inherently unpredictable, and while models are useful, they are simplifications of reality and should be taken with caution.

Q & A

What was the Bitcoin price trend in December 2024?

In December 2024, Bitcoin reached a new all-time high in price at $108,000, although the monthly close was slightly lower at $93,000, which was below the November 2024 close of $96,000. While the price reached a new high, the close did not set a new all-time high.

What does the Relative Strength Index (RSI) indicate about the current Bitcoin trend?

The RSI is currently at 73, which signals a strong uptrend in Bitcoin's price, although it is not in the overbought zone (which would be above 80). A higher RSI indicates more strength in the trend, but the current RSI of 73 is slightly lower than November 2024's value of 75. The RSI suggests that Bitcoin is still in an upward trend, but not yet in a FOMO (Fear of Missing Out) phase like in previous bull markets.

What is the significance of the 200-week moving average in Bitcoin's price cycle?

The 200-week moving average (which is around $43,000) serves as a long-term trend indicator for Bitcoin. It typically becomes more relevant during bear markets, acting as a price floor. In the current bull market, the price of Bitcoin is significantly above this moving average, meaning it is less relevant for price prediction at this stage. However, it is important in bear markets as a potential support level.

How does the Realized Price metric work, and what does it indicate about Bitcoin's market?

The Realized Price is the average price of Bitcoin that has moved on-chain, not on exchanges. It reflects the cost base of Bitcoin that has been transacted within a specific period. The two-year Realized Price has been increasing sharply, which is a strong indicator of a bull market. In previous bull markets, the Realized Price has shown significant upward movement, and its divergence from the 200-week moving average signals a continuing bull market.

What does the divergence between the Realized Price and the 200-week moving average signify?

The divergence between the Realized Price (the gray line) and the 200-week moving average (the black line) is a typical characteristic of a bull market. When the Realized Price moves sharply upwards, while the 200-week moving average remains relatively flat, it signals a period of strong price growth, as seen in previous bull markets in 2013, 2017, and 2021.

What are the predictions of the Stock-to-Flow model for Bitcoin's price in 2028?

The Stock-to-Flow model predicts that Bitcoin's price could reach an average of $500,000 by the 2028 halving. However, it is important to note that this is an estimate and not a precise figure, with the range expected to be between $250,000 and $1,000,000 due to the inherent uncertainty in market predictions.

How does the efficient market hypothesis relate to Bitcoin's price predictions?

The efficient market hypothesis suggests that markets are unpredictable, meaning that any prediction about future prices is inherently uncertain. Despite this, the analysis tries to estimate potential future trends, though it acknowledges that all models have limitations and no one can predict Bitcoin's price with certainty.

Why is the 2024 Bitcoin price not expected to peak in 2025 based on stock-to-flow estimates?

According to the Stock-to-Flow model, Bitcoin's price in 2025 is expected to follow a long-term upward trend, with an average price potentially ranging from $250,000 to $1,000,000 by 2028. This is much higher than the $200,000 prediction that is common among other models, which anticipate a peak in 2025 followed by a significant crash. The Stock-to-Flow model suggests a longer and higher growth trajectory for Bitcoin.

What is the significance of the 2024 halving in Bitcoin's market predictions?

The 2024 Bitcoin halving plays a critical role in influencing the future price of Bitcoin according to models like Stock-to-Flow. The halving reduces the rewards for miners, which typically leads to reduced supply and potentially higher prices due to scarcity. The Stock-to-Flow model has adjusted its predictions based on historical halving cycles, forecasting significant price increases after each halving event.

Why are predictions of Bitcoin's price range so variable among different models?

Predictions of Bitcoin's price vary widely among models due to differences in their assumptions, data sources, and methodologies. While the Stock-to-Flow model forecasts an average price of $500,000 by 2028, other models predict lower peaks (around $200,000 in 2025) and expect a subsequent crash. The range of predictions reflects the uncertainty in predicting Bitcoin's long-term price movements and the complex nature of its market behavior.