It From warehouse to flowmodel is one of the most used and famous models for the bitcoin price (BTC) to predict. The model has predicted them with astonishing accuracy in the past, but at the moment there seems to be little left of this glittering reputation. There is a lot of criticism and skepticism about the model, as the current price deviates a lot from the expected price.
What is the Stock to Flow model?
The S2F model looks harder than it actually is. It is simply the total supply (buffer stock) divided by the annual production capacity (to flow). It is an indicator of the scarcity of a good. The model was created by the anonymous Dutch analyst who hides on Twitter under the name of ‘100tillionUSD’. Partly thanks to this well-known model, the well-known analyst, also known as ‘PlanB’, has managed to gain 1.8 million Twitter followers and is a very well-known name in the bitcoins-world.
BTC price deviation
The S2F multiple compares the price of the S2F model to the actual price of bitcoin on a given day. On November 19, according to the model, the price should be $72,000, while the actual price was just over $16,000. This brought the S2F multiple to -1.47 and describes the deviation between the expected course and reality.
Stock-to-flow multiple (463d)
2022-11-18, 23:59 UTCln(actual/model)
Actual price: $16,661.52
Model Price: $72,274.09
Multiple S2F: -1.47 pic.twitter.com/6zwAdInMRv— S2F multiple (@s2fmultiple) November 19, 2022
On November 10, the S2F multiple even recorded a record value of -1.50. The Dutch analyst also shared in the day the monthly one Relative strength index (RSI), with a value of 40.5, had never been so low in the entire history of cryptocurrency. The RSI is used to gauge the momentum of a currency.
Analytics platform LookIntoBitcoin came to conclusions similar to S2F Multiple with an alternative reflection of model deviation. In a tweet the creator, Philip Swift, indicated the following:
“The price has now moved further away than ever below the S2F line. Currently a variance of -1.26 vs. the previous low of -1.21 in 2011.”
Plan B sees the situation around FTX as noise and expects the halve in 2024 it will again lead to a huge price increase of the king of cryptocurrencies.
