Experts believe Bitcoin is on its way to $92,000
- Bank of America outlines the benefits of adopting Bitcoin as legal tender in El Salvador, suggesting a bullish outlook on the leading cryptocurrency.
- Bitcoin is decoupling with gold, correlation turns negative as the bellwether cryptocurrency rallies.
- Bitcoin mining difficulty is up 7.3%, marking the first significant increase since the hashrate migration.
Bitcoin nearly reversed the inflows to exchanges during the May sell-off with peak outflows. The asset has rebounded strongly and is ready for a breakout.
S2F creator Plan B confirms bullish prediction for BTC, says bull market is not over
The Stock to Flow model (S2F) proposed by Plan B essentially compares BTC to scarce commodities like gold or silver. The model advocates that Bitcoin is a scarce resource and they should retain their value in the long term, with relative scarcity and low supply.
Proponents and analysts criticized S2F for the past four weeks as BTC deviated from the predicted price. In the second leg of the bullrun that appears to have started in the past week, BTC is no longer rangebound.
The largest cryptocurrency by market capitalization is back above the $46,000 level, and Plan B has confirmed his bullish prediction for BTC. In a recent interview, the creator of S2F said,
The Bitcoin bull market is not over, and we will see $100,000 till Christmas.
Experts agree with Plan B’s prediction for BTC price. Nikolay Shkilev, Co-founder and CEO of Zelwin ecosystem, recently shared a new target for Bitcoin based on his analysis. Shkilev tweeted:
#BTC looks ready to reclaim the yellow mid-line for bull run confirmation, which currently sits at $57K.
— Nikolay Shkilev (@NShkilev) August 9, 2021
If confirmed, delta/top mean (orange) would be my next target at $92K.
If that level is then reclaimed, would be targeting top price model which currently sits at $175K. pic.twitter.com/TDZ70ZwqrH
Increasing adoption is likely to drive the asset’s demand and fuel the narrative of BTC hitting $100,000 by the end of 2021. A report published by Bank of America in July 2021 highlights the pros of accepting Bitcoin as legal tender in El Salvador.
Using Bitcoin for remittances could potentially reduce transaction costs compared to traditional remittance channels.
The bank sees merit in the Foreign Direct Investment (FDI) that Bitcoin brings to El Salvador. However, the problem of volatility when BTC is converted to fiat remains at large.
With the ongoing BTC price rally, it is clear that the decoupling from gold is bullish for Bitcoin.
Another factor influencing the price trend is the great western hashrate migration (the shift of BTC mining farms from China to the West) that was followed by negative adjustments in mining difficulty. The most recent increase of 7.3% marks the first significant shift since the migration.
Bitcoin’s current hash rate and decoupling from gold mark the beginning of the second leg of the BTC bullrun with a target of $92,000.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
