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Amid the recent bloodbath in the crypto market, the Bitcoin price lost the last 2022 bottom support of $18400-$18200. Losing this crucial support indicated the BTC price should continue the prevailing downtrend to revisit lower levels. However, the Stock to Flow (S2F) model by Plan B and RSI divergence suggest that the Bitcoin price will recover in 2023.
Key points:
- The technical indicators suggest an oversold Bitcoin price
- A bullish breakout from the weekly 20 EMA slope should offer an early sign of recovery.
- The intraday trading volume in Bitcoin is $18.8 Billion, indicating a 4.32% drop
Source-Tradingview
The Bitcoin price tried to sustain above the $18400-$18200 support for nearly five months. However, with the recent incident of the FTX crypto exchange crash, the market witnessed a significant sell-off, leading to a massive breakdown of BTC price from the aforementioned support.
Moreover, a weekly candle closing below the $18200 support reflects the sellers are confident to reach lower levels. Thus, if the price shows sustainability near its current value, the post-retest downfall should lead Bitcoin 23.4% down to $12500.
However, an evident bullish divergence in the weekly-RSI slope near the oversold region indicates the selling activity has overextended. This divergence indicates the coin may soon recover in the short term to stabilize the prices.
Stock to Flow (S2F) Model Hints Bitcoin Rise Significantly in 2023
The S2F model created by Plan B predicts that the price is more deviated from the actual price of bitcoin than at any time in its history, and the S2F model predicts that the price of bitcoin will be $78,280 on December 31, 2022. https://t.co/0dqVqoUcIV pic.twitter.com/uXPFXFl51A
— Wu Blockchain (@WuBlockchain) November 20, 2022
An influential Chinese crypto news reporter Colin Wu recently highlighted the vast deviation of Bitcoin price from the S2F model’s predictions and suggested the coin price will be $78,280 on December 31, 2022.
The core concept of the model proposes that as the supply of assets lowers, its market value will increase.
Though such massive growth in a short span seems impossible, the Bitcoin price has previously followed the S2F mode. Moreover, in 2011 and early 2014, the model showed similar deviations on the upside, which eventually led to a sharp price decline back to the Stock/Flow slope.
Thus, it can be said that in the year 2023, the Bitcoin price will rise higher and decrease the gap with the Stock/Flow slope.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/will-bitcoin-price-continue-its-downfall-in-coming-weeks/