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  • Writer's pictureConnie Chan

Analyst predicts BTC won't fall below $35,000 again.

Analyst predicts BTC won't fall below $35,000 again.
Analyst predicts BTC won't fall below $35,000 again.

An analyst has predicted that Bitcoin (BTC) will not drop below $35,000 again. The creator of the controversial Stock-to-Flow (S2F) model, PlanB, recently made a bold prediction about the future of Bitcoin's price, which has garnered attention from the crypto community.

PlanB, using his social media handle X, stated that Bitcoin's price will never dip below the $35,000 threshold again. To support his claim, PlanB presented a chart that illustrates Bitcoin's valuation trend in relation to its intrinsic hash rate. According to PlanB, this relationship serves as a crucial indicator of the enduring value of the digital currency.

While acknowledging the possibility of unforeseen events or short-term market volatility, PlanB maintains that, based on the current fundamentals, particularly the cost of electricity ($/kWh) involved in Bitcoin mining, it is "unlikely" for the asset's market value to fall below the mentioned support level of $35,000.

Mining And Market Arbitrage: A Key Factor

The main point of PlanB's argument is the distinct arbitrage opportunity that exists between Bitcoin miners and everyday users. Miners, who invest significant amounts of electricity in mining the digital asset, and users, who usually buy Bitcoin with fiat currency on exchanges, contribute to a dynamic market environment.

According to PlanB, this arbitrage could become even more significant if a spot Bitcoin Exchange-Traded Fund (ETF) is launched in the US.

🚨BREAKING: Bitcoin valuation based on difficulty (hashrate) increased to $35k yesterday. IMO this could mean that, apart from possible black swans or short term volatility, based on $/kWh-arbitrage fundamentals … BTC will never go below $35k ever again. — PlanB (@100trillionUSD) November 27, 2023

According to PlanB, miners who possess specialized knowledge about the market and Bitcoin production costs may start demanding a premium when selling the cryptocurrency. This change could have a significant impact on the way Bitcoin is traded and valued.

The launch of BTC spot ETFs is anticipated to increase mainstream acceptance and investment in Bitcoin, which could establish a more stable price floor as predicted by PlanB.

Bitcoin Hash Rate And Market Dynamics

Delving deeper into the concept of Bitcoin's hash rate, it is crucial to understand its role in securing the network and validating transactions. The hash rate measures the computational power used for mining and processing transactions on the blockchain.

A higher hash rate indicates enhanced security and efficiency in the network, often leading to increased investor confidence and a higher asset valuation.

According to PlanB's analysis, as the hash rate continues to rise due to technological advancements and increased mining activities, Bitcoin's valuation is expected to follow suit. This relationship forms the basis of his prediction that Bitcoin will maintain a strong market position and is unlikely to fall below the $35,000 mark.

Bitcoin (BTC) price is moving sideways on the 4-hour chart. Source: BTC/USDT on
Bitcoin (BTC) price is moving sideways on the 4-hour chart. Source: BTC/USDT on

Currently, the price of BTC is trading above $37,000, which indicates an increase of over $2,000 from the support level mentioned by PlanB. As of now, the price of Bitcoin stands at $37,605, showing a 2% rise in the last 24 hours.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


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