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Bitcoin [BTC] Whales Seem Less Confident But PlanB Is Bullish As Ever

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Bitcoin [BTC] is not making waves anymore. After an unprecedented ride, in the first quarter, the trend has changed drastically. While it still continued to be the undisputed market leader, its dominance has declined to 40%. After getting caught on to the bearish trend, the BTC whales have resumed selling and short-term prospects are looking a little bleak.

This was revealed by the blockchain intelligence firm Santiment which noted that the Bitcoin holders holding 100 to 10k BTC have moved more than $5.7 billion worth BTC from their wallet. Its tweet stated,

“Our data indicates that the high-alpha group of ‘Bitcoin Millionaires’ holding between 100 to 10,000 BTC have now shed 120,000 coins ($5.74 billion) from their wallets in the last 5 weeks. This is the least amount of coins held by this group since Feb. 10.”

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In line with this trend of high selling pressure, the analytic platform also revealed Bitcoin’s supply that is sitting on cryptocurrency exchanges has currently bounced back to its highest level since the 14th of January this year. This essentially meant the amount of the tokens being deposited into exchanges has risen was indicative of fear and less confidence among the investors in the BTC market.

Interestingly, 14th of May also marked the largest day of exchange inflows since the Black Thursday crash in March last year.

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In addition, the supply of Tether [USDT] was close to 2021-low. This was a cause of concern since it could suggest that investors are reluctant to buy the latest dip.

But Bitcoin Could In Fact See More Gains

According to PlanB, Bitcoin still has a lot of levels to climb before the bull season closes. In the latest tweet, the analyst well-known for applying the stock-to-flow [S2F] model to Bitcoin, has forecasted that the digital currency could register another meteoric rise in the coming months in the midst of massive downside correction.

PlanB stated that

“Bitcoin’s relative strength index (RSI): we are at the typical mid-bull-cycle drop in RSI (yellow circles), between 2013 and 2017. Excited about the next couple of months.”

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Bitcoin Will Reach $288,000 by 2024? Ethereum’s Vitalik Buterin Begs to Differ

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Ethereum‘s enigmatic co-founder, Vitalik Buterin, has been largely vocal in space over the last few months. Although most of his remarks were based on the development of Ethereum 2.0, his most recent comment was in disagreement with Bitcoin’s quant analyst.

Buterin ‘s recent opinion came on Twitter, criticizing Bitcoin’s Stock-to-Flow model. He indicated that he understood the functionality of the S2F model, but did not believe that a post-halving rise for Bitcoin would take place because the block rewards of miners have been reduced to half.

What is Bitcoin’s Stock-to-Flow model?

Developed by anonymous Bitcoin analyst PlanB, the Stock-to-Flow or S2F model is based on the scarcity characteristics of Bitcoin, where its value is measured in terms of outstanding supply against market inflows.

This model of prediction has been widely used over the last few years to predict the price of Bitcoin after the recent halving. The model argued that the value of Bitcoin would increase after halving, as the supply of BTC would decrease in the industry. Some users believed in this BTC theory as Bitcoin had surged up to an all-time high of $20,000 in 2017, right after its halving in 2016.

Now, according to his recent analysis, PlanB had implied that Bitcoin’s price will possibly sky-rocket all the way to $288k by 2024.

However, Ethereum’s Buterin disagreed with this prediction based on one fundamental flaw around S2F. Vitalik tweeted,

According to the above tweet, Buterin believed that the S2F theory is unfalsifiable or in simple terms, it is impossible to disapprove. However, he stated that because he believed that analysts can associate any value of Bitcoin as evidence that the S2F model is accurate. Hence, without any coherent correlation, the model is not exactly helpful.

After Buterin’s statement, PlanB responded to his criticism and replied,

“I beg to differ. Halvings make BTC scarcer (in S2F terms) and scarce assets (BTC, gold, silver, etc) seem to have a higher value than non-scarce assets. It is not so much about the peaks (those are caused by greed and FOMO), but the average price levels.”

So, is Vitalik right over the S2F prediction?

At the moment, none of them is particularly correct with their analysis. Buterin is basing his assumptions by disapproving the first assumption of S2F, where Bitcoin has been strictly adhered to as a commodity. Hence, invalidating the theory by taking out its principle attribute is probably not the right step forward.

However, it is far from certain that Bitcoin will reach $288k by 2024 based on the S2F model. Therefore, only with time, the future of Bitcoin will attain better clarity.