Cryptocurrency prices plunged overnight with the selling pressure climaxing around the opening of the European markets, closing of Asia.
This left Bitcoin back below $60,000 for the first time in 11 days...
And Ethereum dropped below $4,000...
There was no obvious news-driven catalyst for the drop and many investors were actually buoyed the last few days after a filing with the SEC suggested Tesla had left the door open to accepting Bitcoin for its products in the future.
“During the nine months ended September 30, 2021, we purchased an aggregate of $1.50 billion in bitcoin. In addition, during the three months ended March 31, 2021, we accepted bitcoin as a payment for sales of certain of our products in specified regions, subject to applicable laws, and suspended this practice in May 2021,” the 10-Q document reads.
“We may in the future restart the practice of transacting in cryptocurrencies (‘digital assets’) for our products and services.”
Additionally, CoinTelegraph reports that PlanB, creator of the popular Bitcoin Stock-to-Flow (S2F) model, called Bitcoin’s price retracement from the $60,000-level the “2nd leg” of what appeared like a long-term bull market.
In doing so, the pseudonymous analyst cited S2F, which anticipates Bitcoin to continue its leg higher and reach $100,000 to $135,000 by the end of the year.
The price projection model insists that Bitcoin’s value will keep on growing until at least $288,000 per token due to the “halving,” an event that takes place every four years and reduces BTC’s issuance rate by half against its 21 million supply cap.
Bitcoin after the 2012, 2016 and 2020 halving. Source: PlanB
Notably, Bitcoin has undergone three halvings so far: in 2012, 2016 and 2020.
Each event decreased the cryptocurrency’s new supply rate by 50%, which was followed by notable increases in BTC price. For instance, the first two halvings prompted BTC price to rise by over 10,000% and 2,960%, respectively.
The third halving caused the price to jump from $8,787 to as high as $66,999, a 667.50% increase. So far, S2F has been largely accurate in predicting Bitcoin’s price trajectory, as shown in the chart below, leaving bulls with higher hopes that Bitcoin’s post-halving rally will have its price cross the $100,000 mark.
Bitcoin S2F as of Oct. 26. Source: PlanB
PlanB noted earlier this year that Bitcoin will reach $98,000 by November and $135,000 by December, adding that the only thing that would stop the cryptocurrency from hitting a six-digit value is “a black swan event” that the market has not seen in the last decade.
Despite the high price projections, Bitcoin can still see big corrections in the future. PlanB thinks the next crash could wipe at least 80% off Bitcoin’s market capitalization, based on the same S2F model.
“Everybody hopes for the supercycle or the ‘hyperbitcoinization’ to start right now and that we do not have a big crash after next all-time highs,” the analyst told the Unchained podcast, adding.
“As much as I would hope that were true, that we don’t see that crash anymore, I think we will. [...] I think we’ll be managed by greed right now and fear later on and see another minus 80% after we top out at a couple hundred thousand dollars.”