PlanB Bitcoin Prediction May 2024

Summary

In this insightful video, the host delves into the Bitcoin market using seven key charts to analyze trends and make predictions. Despite a slight dip this month, Bitcoin remains 36% up year-to-date. The Bitcoin Stock-to-Flow model, which has historically been accurate, suggests a price target of around $500k by 2024 and $100k this year due to the need for mining revenue recovery post-halving. The Market Cycle model indicates that the current bull market is ongoing, with dips of up to 25% considered normal. Technical indicators like the RSI have normalized, and the 200-week moving average provides a conservative floor. The realized price and return metrics offer insights into market support levels and profit-taking behavior. Overall, the video presents a bullish outlook on Bitcoin, suggesting exponential returns until at least 50% adoption is reached.

Takeaways

• 📈 Bitcoin closed the month slightly above $60k, which is $10k below the previous month, but still up 36% year to date.
• 🔍 The Bitcoin Stock-to-Flow model shows an average price of $34,000, slightly below the $55,000 predicted by the 2019 model, but within the same order of magnitude.
• ⏳ This month marks the last 'blue dot' before the countdown to the next Bitcoin halving in 2028 begins.
• 📊 The model suggests that the Bitcoin price will likely catch up to the model value, which is expected to rise after each halving, with the error margin decreasing over time.
• 💰 The presenter predicts that Bitcoin will inevitably reach $100k in 2024 due to the need for mining revenue to recover after the halving, which reduced revenue by 50%.
• 📉 Despite market dips, the Bitcoin Market Cycle model indicates that the bull market is still ongoing, with on-chain transactions signaling its continuation.
• 📌 The RSI (Relative Strength Index) has normalized to 66 after a high of 77, suggesting potential for further price increases in the upcoming months.
• 💹 The 200-week moving average for Bitcoin has increased slightly to $34,000, providing a conservative floor for the price in a bullish market.
• 💰 The realized price of Bitcoin, which is the cost price weighted against the last transacted price, is currently at $29,000, providing a strong support level in the market.
• 📈 The realized return for Bitcoin in April was positive at 7%, indicating that sellers are taking profits, which is typical behavior in a bull market.
• 🔄 Bitcoin in profit has dropped slightly, with 12% of holdings now in loss, which could be compared to similar patterns seen in 2020 and 2012 before the market resumed its upward trend.

Q & A

What is the Bitcoin Stock-to-Flow (S2F) model?

The Bitcoin Stock-to-Flow model is a chart that uses the existing supply of Bitcoin (stock) and the amount of new Bitcoin generated (flow) to predict future price movements. It's based on the concept that the scarcity of Bitcoin, as new coins are produced at a decreasing rate, will drive up its price.

How did Bitcoin perform in the month discussed in the script?

Bitcoin closed the month slightly above $60,000, which was $10,000 below the previous month's close. Despite this, Bitcoin is still up by 36% year to date.

What is the significance of the 'blue dot' in the Bitcoin Stock-to-Flow model?

The 'blue dot' represents the current month in the Bitcoin Stock-to-Flow model. It signifies the last month before the countdown to the next Bitcoin halving event begins, which occurs approximately every four years.

What is the current average price of Bitcoin according to the model?

The current average price of Bitcoin, as calculated by the Stock-to-Flow model, is $34,000.

What is the predicted target price for Bitcoin by 2024 and 2028?

The predicted target price for Bitcoin by 2024 and 2028, according to the updated model parameters, is still around $500,000 on average.

Why is the halving event important in the Bitcoin market?

The halving event is significant because it reduces the rate at which new Bitcoins are created, effectively decreasing the supply. This reduction in supply typically leads to an increase in price, as the scarcity of Bitcoin increases.

What does the 'realized price' of Bitcoin represent?

The 'realized price' of Bitcoin represents the cost price of all Bitcoins in circulation, weighted against their last transacted price. It provides insight into the average selling price of Bitcoin over a given period.

What is the current realized price of Bitcoin?

The current realized price of Bitcoin is $29,000, and the two-year realized price is $45,000.

What does the 'realized return' indicate?

The 'realized return' indicates the profit or loss that sellers are making when they sell their Bitcoins. A positive realized return, like the current 7%, suggests that sellers are taking profits in the market.

What is the current status of the Bitcoin market cycle?

The Bitcoin market cycle, as indicated by the on-chain transactions, is still in a bull market phase, despite recent dips in price.

What is the significance of the Relative Strength Index (RSI) in the context of Bitcoin's market cycle?

The RSI is a technical indicator that measures the speed and change of price movements. In the context of Bitcoin's market cycle, a high RSI, such as above 80, indicates steep price increases and a strong bull market.

What does the 'Bitcoin in profit' metric represent?

The 'Bitcoin in profit' metric represents the percentage of Bitcoin holdings that are currently in profit. A drop in this metric indicates that a portion of Bitcoin holders are experiencing losses, which can influence market sentiment and behavior.

Outlines

00:00

📈 Bitcoin Stock-to-Flow Model and Market Analysis

The video discusses the Bitcoin market using various models and indicators. The Bitcoin Stock-to-Flow model is highlighted, showing that despite a lower closing price this month compared to last, Bitcoin is still up by 36% year to date. The video emphasizes that this month is the last 'blue dot' before the next Bitcoin halving in 2028, which historically coincides with the model's price. The average price is calculated at $34,000, slightly below the 2019 model's $55,000 prediction but still within the same order of magnitude. The presenter predicts that the price will gradually align with the model's value, suggesting a potential price increase. The video also discusses the inevitability of reaching $100K this year due to the need for mining revenue recovery following the halving. It concludes by contemplating whether Bitcoin's price will follow diminishing returns or continue to provide exponential returns, with the presenter leaning towards the latter until at least 50% adoption is achieved.

05:02

🔍 Bitcoin Market Cycle and Technical Indicators

The script moves on to the Bitcoin Market Cycle, noting that despite some believing the bull market is over, on-chain transactions indicate it continues. The presenter uses this to stress the importance of models over emotions. Dips of up to 25% in a bull market are considered normal. Technical indicators such as the RSI are discussed, noting that it has normalized to 66 from the previous high of 77. The presenter anticipates that RSI will exceed 80, indicating a strong bull market with significant price increases. The 200-week moving average is highlighted as a conservative floor at $34,000. The realized price of Bitcoin, representing the cost price weighted against the last transacted price, is noted as a significant support level in bull markets. The presenter observes a plateau in the realized price and suggests that market dips typically bounce at this level. The script ends with a brief mention of the realized return being positive at 7%, indicating that sellers are taking profits, which is a logical move in a bull market.

10:05

📊 Bitcoin Realized Metrics and Market Behavior

The video script delves into Bitcoin's realized metrics, explaining that the realized price, which is the cost price of all Bitcoins weighted against their last transacted price, is currently at $29,000, with the two-year realized price at $45,000. The presenter suggests that dips in the market usually find support at the realized price level and that this pattern is likely to continue. The realized return is mentioned as being positive at 7%, indicating that sellers in April have seen a profit. This is framed as a typical behavior in a bull market, especially for those new to cryptocurrency investing. The percentage of Bitcoin in profit has decreased as some buyers at the $70k mark are now at a loss. The presenter draws parallels with market behavior in 2020 and 2012, suggesting that the current situation is similar to these periods and that the bull market is likely to resume after the current dip.

Keywords

💡Bitcoin

Bitcoin is a decentralized digital currency that operates without a central bank or single administrator. It is the first and most well-known cryptocurrency. In the video, Bitcoin is the main subject of discussion, with its market performance and future predictions being analyzed using various models and indicators.

💡Stock-to-Flow Model

The Stock-to-Flow (S2F) model is a method used to value commodities, particularly precious metals and, in this context, Bitcoin. It compares the existing supply (stock) to the rate at which new supply is produced (flow). The video discusses how Bitcoin's S2F model suggests a significant increase in price post the halving event, which aligns with historical trends.

💡Market Cycle Model

The Market Cycle Model is a tool used to analyze and predict the stages of a financial market, typically identifying periods of bull and bear markets. In the video, it is used to assert that despite recent dips, the Bitcoin market is still in a bull market phase based on on-chain transaction data.

💡Relative Strength Index (RSI)

RSI is a momentum oscillator that measures the speed and change of price movements. It is used to identify overbought or oversold conditions in the market. The video mentions RSI to discuss the normalization of Bitcoin's price momentum after a high RSI reading in the previous month.

💡200 Week Moving Average

The 200 Week Moving Average is a technical indicator used in trading to smooth out price data and identify longer-term trends. It is mentioned in the video as a conservative floor for Bitcoin's price, indicating that despite market fluctuations, the price tends to rise significantly higher in bull markets.

💡Realized Price

The Realized Price is an on-chain metric that represents the cost basis of Bitcoin, calculated by taking the sum of all transactions and dividing it by the number of Bitcoins transacted. The video discusses how the realized price acts as a significant support level in bull markets and how it has historically influenced market behavior.

💡Realized Return

Realized Return is a metric that calculates the profit or loss investors have made from their investments over a specific period. In the video, it is noted that the realized return for April was positive, indicating that sellers were taking profits, which is a common behavior in bull markets.

💡Bitcoin Halving

Bitcoin Halving is an event that occurs approximately every four years, reducing the reward for mining new blocks by 50%. The video discusses the impact of the halving event on Bitcoin's price, mining revenue, and the overall market cycle, suggesting that it typically leads to price recovery and growth.

💡Exponential Returns

Exponential Returns refer to an investment's growth at a rate that accelerates over time. The video suggests that Bitcoin may continue to provide exponential returns until it reaches a 50% adoption rate, which is still far off, indicating a positive outlook for future price increases.

💡On-Chain Transactions

On-Chain Transactions are those that occur within the blockchain network and are recorded on the blockchain. The video uses on-chain transaction data to support the assertion that the Bitcoin market remains in a bull market phase, despite short-term dips.

💡Dips and Bull Markets

Dips refer to temporary decreases in the price of an asset, while a bull market is characterized by a prolonged upward price trend. The video explains that even within a bull market, it's normal to experience dips, and these are often followed by a market recovery and continued growth.

Highlights

Bitcoin closed the month slightly above $60k, erasing the $10k gain from the previous month.

Despite the lower closing price, Bitcoin is still up 36% year to date.

This month is the last 'blue dot' before the countdown to the next Bitcoin halving in 2028 begins.

The average Bitcoin price calculated at the moment is $34,000, slightly below the 2019 stock-to-flow model prediction of $55,000.

The Bitcoin stock-to-flow model parameters have not changed significantly, with targets for 2024 and 2028 still around $500k on average.

The halving event typically sees a decrease in error as the Bitcoin price catches up with the model value.

The presenter predicts that Bitcoin will inevitably reach $100k in 2024 due to the need for mining revenue to recover after the halving.

The Bitcoin market cycle model indicates that the bull market continues, with the red dot not turning to yellow.

RSI has normalized to 66, which is above the levels seen during the 2020 halving, suggesting potential for higher RSI and price increases.

The 200-week moving average for Bitcoin is at $34,000, serving as a conservative floor in the current bull market.

The realized price of Bitcoin, reflecting the cost basis of all Bitcoins, is at $29,000, providing a significant support level in the bull market.

Dips in the market usually bounce at the realized price level, as seen in previous bull markets.

The realized return for Bitcoin in April was positive at 7%, indicating sellers are taking profits.

Bitcoin in profit has dropped, with 12% of holdings now in loss, reflecting a common behavior in bull markets.

The presenter suggests that the current market situation is similar to that of 2012, with a potential for the bull market to resume after a dip.

The presenter encourages subscribers to continue following the channel for more insights on Bitcoin and the market.

Transcripts

welcome back to plan B on YouTube today

we discuss Bitcoin markets using these

seven charts Bitcoin stock tolow model

the market cycle model relative strength

index 200 week moving average Bitcoin

realized price realized return and

Bitcoin in profit so the first chart

Bitcoin stock to flow

model uh Bitcoin closed this month a bit

above 60k

and that's 10K below last month uh

actually completely erasing last month's

10K

gain um so maybe the 70k of last month

was a bit too much that was ETF fomo and

of course there was a never seen before

alltime high before the halfing and all

that

so despite this a bit lower uh closing

price this month Bitcoin is still 36% up

year to date and also Bitcoin is at the

haling because this month is the last uh

blue

dot um because it's month

zero here and from next month may we

will count down again to the next

halfing in 2028 but this month is the

last Blue Dot and every blue dot last

Blue Dot every haling has been at this

gray stock tolow model price so that's

very nice um also the average price is

something that we can calculate at the

moment it's

34,000 and that's a little below of

course the um

55,000 that the 2019 original stock to

flow model predicted but it's ballpark

okay it's the same order of magnitude

and and don't forget in 20 9 the Bitcoin

price was below

4,000 so um also note that the average

bitcoin price was above the stock to

flow model price in the cycle before the

last cycle the 2016 2020 cycle so um I

updated the model uh parameters did not

change much uh 2024 2028 Target is still

around 500k on average so uh also note

that the error always goes down um after

the halfing so there is a halfing the

model value goes up and it of course it

takes some time the Bitcoin price has a

lag to catch up with the model value

it's every halfing it's the same it will

also be true this halfing in my opinion

so we see the error already going down

it will go down again because the price

will not be 500k of course uh in May it

will slowly over the months uh go into

the that model price so what's next for

2024 I repeat the same as last video it

is inevitable that we reach 100K in my

opinion because minor Revenue

has to recover and Mining Revenue

because of the halfing did half um um

all the miners the entire

industry has seen its Revenue drop by

50% and it has to recover and usually

last three halings it did recover within

four to eight months so that's well

within this year 2024 and the only way

for mining Revenue to recover is that

price doubles so estimating from current

price of 60k we should be well above

100k this

year then 2025 I think the top will be

then because historically the top of the

bull market after the has been after the

halfing and and about one year one and a

half year after the halfing so that's

that brings us in

2025 and the big question of course is

um will the price follow diminishing

returns um and I think a price of well

around 200k for the top uh will be in

line with diminishing returns or will

price indeed follow the stock to flow

model again and will there be

exponential returns again you know my

answer I think stock to Flo is still

valid I think we will have exponential

returns at least until 50% adoption um

and we're now at well somewhere between

1 and

10% uh so far away from that 50%

adoption I think exponential returns are

what we're going to

see okay next

chart the Bitcoin Market cycle and

everybody was watching for that red dot

if it would turn to Yellow it did not so

the uh the bull market continues I know

the emotions are very different I know

some the bull markets over uh already

but that's exactly why we use models to

fight against emotions and the onchain

transactions that this Market cycle

indicator is based on the onchain

transactions signal that we are still in

a bull market despite this little dip

and note by the way

that here is a dip as well

here's a dip as well it's very

similar here's a dip here's a dip so red

doesn't mean there won't be dips in fact

uh 25% dips are quite normal in a bull

market so better get used to it there

might be more um but the good thing is

red will continue in my opinion next

chart let's go to the technical

indicators RSI last time we had a very

high RSI of 77 and this month last month

it dropped to 66 it normalized if you

will because we were talking here about

well is this normal it's the highest uh

it could be normalizing it could be a

new normal but okay so it normalized and

it's now at the level of the last couple

of halfing so this is the 2012

halfing the 2016 halfing and the 2020

halfing was of course below so we're

above the 2020 halfing levels in in

RSI and well this is the the last Blue

Dot the next dot the May dot will be red

so in fact we haven't even started yet

in my opinion so I think that the red

dots that we will see uh starting from

May the red dots will be higher than the

blue dots so the red RSI will be higher

than the blue RSI which means uh we will

see rsis well above

80 like we have seen in the previous

bull markets and that means large price

increases RZ R RSI

80 is

really absolute steep price increases

and a real bull market so I think we're

U we still have that in front of

us if we look at

the 200 week moving

average nothing much happened it it

increased a little as it all as the 200

we moving average always does and it's

now at at

34,000 so you can see that is a very

conservative floor but in Bull

markets uh it's indeed very conservative

in bare markets it might touch or even

go below the 200 we moving average but

in Bull markets we will go

uh far higher and I think uh the 200

week moving average is maybe not not

very

interesting this chart the realiz price

is very interesting and I tell you why

the realiz price which is basically the

cost price of Bitcoin all the Bitcoins

all the 19.6 million Bitcoins weighted

against their last transacted price is

now um it's now it's now

$29,000 and the twoyear realized price

is

$45,000 it's a little bit higher than

last month but it's plateauing a little

bit same is true for the femon um uh

realized price is at 60k right

now and the very interesting thing is

that that is a huge support level in

Bull markets so dips like we see like we

seeing last month usually bounce on the

femon realized price the short-term

hudler also known as and we can see that

here in 2020 it was a bull market it

dropped till the five Monon realized

price and you can also see the plateau

in the realized price and the two-year

realized price you can see it here in

2017 here in 2017 that little dip

dipped until the light blue femon

realized price and then went up again I

think that's what we're going to see as

well and it same happened in in 2012

right here puff it goes to the the light

blue line and then resumes the bull the

bull market I think that's the exact

same situation that we're in right

now realized

price and now realized return realized

return is still positive 7% so April

sellers got 7% return and the data

suggests that the sellers are taking

profit and that uh it's not the ETF weak

hands that sold uh taking profit in a

bull market is a very logical thing to

do especially for traditional Finance

people 7% is a lot in um in a couple of

months in traditional Finance terms so

don't blame them uh sometimes and

especially if you're new to the market

to the Bitcoin Market you want to see if

if the profits are real and you want to

take the profit out and and and uh and

then reinvest it that's what I think is

going to happen Bitcoin in profit also

dropped a bit of course it's not 100%

anymore because the buyers at 70k are in

loss and um so so 12% is in loss right

now and that's yellow

and we could probably compare that a

little bit to what happened in 2020 here

red red yellow and then the bull market

resumes or in 2012 we see a beginning of

the bull market and then yellow and then

second start I don't think we can

compare it to

2013 which was after a

10K and then uh the bull market

continued to do another

10K uh or um with 2019 when there was a

very early bull market a year or it

seemed to be a very early bull market

year before the halfing that was just

too early we're now at the halfing so I

think it's more like 20120 and 2012 but

time will tell okay please subscribe to

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