Bitcoin price drastic rise to $31,000 by December 2020 – exploring the BTC S2F model


  • Bitcoin halving effect is yet to kick in according to the S2F model popularized by PlanB.
  • Bitcoin S2F model predicts the parabolic rise of BTC to $18,000 by October and $31,000 by December 2020.

The bellwether cryptocurrency Bitcoin has generally been on an upswing since the Coronavirus-triggered breakdown in March (of course, the frequent dips notwithstanding). Amid the recovery came the third mining reward having on May 11, 2020.

Understanding Bitcoin halving and its impact on the price

Bitcoin halving is an event integrated into the BTC blockchain code that ensures that its mining rewards are slashed into half every four years. Halving is key to ensuring that the coin's inflation is controlled and that the BTC correctly hits the 21 million maximum supply.

Speculation around halving tends to keep investors and cryptocurrency enthusiasts on edge, mainly supported by the first two halving events (2012 and 2016). In both of the events, Bitcoin eventually rallied to hit new all-time highs.

Unfortunately, the halving in May 2020 failed to rally the price upwards, as was expected. Many analysts and investors are reducing the halving to a “non-event.” Speculation surrounding halving developed due to the decrease in the number of coins coming into the market hence lower supply. Demand tends to increase after halving. Subsequently, if supply remains constant or decrease, a rippled effect is expected to push the price higher.

Was the 2020 Bitcoin halving a “non-event?”

The impact of the halving has either been delayed or ignored entirely. Many key figures and analysts said that times have changed since the first two events; hence little impact was expected. The Head of Business Development and Sales at Matrixport, a platform for cryptoassets financial services, Cynthia Wu told CoinDesk around the halving time:

Halving was already priced in, and the cryptocurrency could trade in the range of $8,000 to $10,000 in the near term.

Indeed there was a halving craze following the crash in March when Bitcoin traded lows of $3,800. However, the impact could not push significantly past $10,000 leading to somewhat sideways trading between $8,000 and $9,500.

Over the past couple of months, the flagship cryptocurrency has broken several resistance zones, including $10,000, $11,000, and $12,000. A new yearly was also traded around $12,500 before the uptrend was gagged under $12,000. On Tuesday, September 8, Bitcoin is trading at $10,275 after recovery from a dip to $9,900.

How likely is Bitcoin hitting $18,000 by October?

 The Bitcoin Stock-to-flow (S2F) model, mainly popularized by a renowned analyst, PlanB gives a clear outline of where BTC price is heading. The model regards Bitcoin as other traditional assets; gold and silver. The S2F rations are utilized to evaluate a commodity's prevailing stock (current total supply) against its production (BTC's rate is being mined). A higher ratio means that the commodity (BTC) is getting scarcer and likely to increase in value in the future.

Bitcoin S2F chart

BTC S2F model

PlanB, alongside the S2F model believers, believes that the halving effect is yet to Bitcoin. Bit Harington highlights that after the halving in 2016, Bitcoin took about nine-ten months to hit its previous ATH at $1,200. On hitting this level, FOMO, otherwise referred to as the fear of missing out, kicked in, leading to the parabolic rally in late 2017 to $20,000.

Bitcoin S2F model has been used to predict massive growth for the leading cryptoasset. Some people now believe BTC can hit $18,000 by October 2020 and $31,000 by December 2020. According to PlanB, BTC has maintained steady growth over the last three months, closing June at $9,132, July at $11,356, and August at $11,665.

The weekly chart highs $10,000 as a formidable support area. Consolidation is, however, expected in the near term according to the leveling Relative Strength Index. A broader scope to the upside highlights the zone between $12,000 and $14,000 as a critical resistance zone. However, if Bitcoin spikes through in the coming few weeks, then the goal to trade at $18,000 by October will be achievable.

BTC/USD weekly chart

BTC/USD price chart

The monthly chart shows that Bitcoin does not have the technical muscle to hit $31,000 by the end of the year. However, fundamentals could prove otherwise, especially if the network continues to grow massively in the coming months. On hitting $20,000, the market could be hit by FOMO, bringing into the picture a parabolic rise like the one in 2017.

BTC/USD monthly chart

BTC/USD price chart


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

MAGA trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption.

More Meme Coins News
Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.

More Bitcoin News
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.

More Ripple News
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.

More Ethereum News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP