'Conservative' BTC supply shock metric now shows Bitcoin to cost at least $ 55,000

Bitcoin ( BTC ) is expected to cost at least $ 55,000 per part according to a metric measuring its so-called “supply shock.” In a Tweete...


Bitcoin (BTC) is expected to cost at least $ 55,000 per part according to a metric measuring its so-called “supply shock.”

In a Tweeter On September 5, analyst Willy Woo pointed out that he added that this was a “conservative” price estimate for BTC / USD.

Bitcoin Price Catching Up With Metrics

While Bitcoin still hasn’t established $ 50,000 as firm support, on-chain metrics have been much more firmly bullish for a while.

Now the so-called “supply shock valuation model” has joined them, yielding a conservative price estimate of $ 55,000.

Supply shock is simply the supply of unavailable BTC divided by the supply of available BTC. It goes further than at first glance, as Woo uses it to “wave a magic wand and gauge investor intent even before any bids and offers are placed.”

“In this view of demand and supply, an investor who does not intend to sell is on the demand side while an investor who is ready to sell is on the supply side”, he explained in a statement. blog post last month.

The valuation model further uses an algorithm to compare supply and demand situations similar to those of today, thus producing a fair price estimate.

“This is cautious because one of the SS metrics, the SS swap, is now on top of all times, so no turning back is possible,” Woo acknowledged in the tweet, referring to the ratio. of parts in cold storage compared to current exchanges. at record levels.

The attached chart shows when the price of BTC moved with and without any change in investor intent.

Bitcoin supply shock valuation model. Source: Willy Woo / Twitter

$ 50,000 first hurdle for the bulls

Bitcoin’s supply shock is a phrase often used in today’s market, with 2021 being the year after a global subsidy halving event.

Related: More like a ‘flow shock’ – BTC price hits bullish trigger as mystery shoppers take back the offer

With miners now only unlocking 6.25 BTC per block, Bitcoin has fared so far basically the same to previous years after halving – 2013 and 2017.

The conservative minimum target of $ 55,000 nonetheless remains above another set of monthly closing lows from analyst PlanB, which assumes September will have a minimum monthly closing of $ 43,000.

Subsequently, however, the rise resumes in earnest, with Bitcoin closing 2021 on at least $ 135,000.

At the time of writing this article, BTC / USD was trading at $ 50,200, having remained in a narrow range throughout the weekend.

1-day candle chart BTC / USD (Bitstamp). Source: TradingView