Cryptocurrency analyst PlanB says bitcoin’s price is still on track after falling below $7,800 for the first time since January.
PlanB, who has gained widespread renown for his application of stock-to-flow (S2F) to bitcoin’s price, says that BTC is still following the model’s prediction despite falling below $7,800 on Monday.
In a tweet published Mar. 8, the analyst said bitcoin’s sudden crash below $8000 had little impact upon the S2F model and that the price prediction was still on track.
Stock-to-flow provides a measure for predicting bitcoin’s price based upon its existing supply and the number of new coins entering circulation. Compared to precious metals such as gold, bitcoin’s S2F is more readily available, with newly mined coins entering the market at a fixed interval.
While crypto market volatility reached a zenith late in the weekend, with the price of bitcoin crashing from above $9,000 to below $8,000, the S2F model prediction remained relatively stable. The 10-day and one-year S2F values averaged around $7,600, putting the prediction in the ballpark of bitcoin’s trading price.
PlanB also reported that bitcoin’s difficulty was set to increase by 7 percent on Monday despite the drop in price.
Tomorrow's #bitcoin difficulty adjustment (which keeps time between blocks at 10 minutes, regardless of hashrate) will be a massive +7%! No sign of weakness 2 months before the halving. 🔥 https://t.co/zMdxlteR6Z pic.twitter.com/xtRYcQJgoD— PlanB (@100trillionUSD) March 8, 2020
Mining difficulty provides an indicator for resources being devoted to bitcoin’s blockchain, with a higher difficulty corresponding to a more robust network.
Featured Image Credit: Photo via Pixabay.com