Due to high volatility, some analysts believe that no technical model can apply to it. But there are some models circulating in the crypto community, which are highly appreciated by traders and investors across the world. These Bitcoin models propagated by analysts include stock-to-flow, Hyperwaves, and Elliot waves.
S2F Model by PlanB
Stock-to-flow (S2F) model is the first one that has gained a high reputation in the crypto ecosystem. The pivotal role in this model has been played by BTC’s scarcity due to its finite supply. As the coin has a fixed supply of 21 million, the scarcity will create after every halving due to a reduction in upcoming supply.
It takes stock-to-flow of gold as standard but there is only one difference, Bitcoin has fixed supply in comparison to gold and silver. So, put into perspective, Bitcoin has a more scarce nature than gold. According to it, the leading digital asset will claim the market cap of $1 trillion after 2020 halving. PlanB, the founder of S2F, said:
“The predicted market value for Bitcoin after May 2020 halving is $1trn, which translates in a Bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving.”
Elliot Wave is the second most acceptable theory to determine bullish and bearish cycles. It is based on the view that the BTC market moves according crowd psychology. Most of the time, it predicts about bearish trends.
Binance Academy published a report on Elliot Wave Theory as it said,” There are thousands of successful investors and traders that have managed to apply Elliott’s principles in a profitable manner.”
It has also received criticism due to its subjective nature. “Critics argue that the Elliott Wave Theory isn’t a legitimate theory due to its highly subjective nature, and relies on a loosely defined set of rules,” Binance Academy added.
Hyperwave Theory by Tone Vays
The Hyperwave Theory has been put forward by the famous crypto analyst and YouTuber Tone Vays. It has limitations because it only tells about bearish spots. It has very controversial popularity in the community due to its extreme predictions.
Tone Vays predicted a very extreme position for Bitcoin when it was trading at its peak. Vays said:
“I was off by 12%. That was my margin of error. When I called $1,500 (from the January 2018 top), I was only off by 12% on the low of the bear market.”