Bitcoin is on its own way to retest on Monday, October 28, they hit the $69,000 price level again as bulls hope to start the week on a positive note. A significant break above $69,000 would set the stage for a sustained rally in the coming months.

Talk about a sustained rallyThe Bitcoin Stock-to-Flow model points to an fascinating trend in the long-term prospects for Bitcoin. In particular, cryptocurrency analyst Plan B referred to the Stock-to-Flow model to suggest that BTC is ready for the next phase of transition.

BTC is ready for the next phase of transition

The Bitcoin Stock-to-Flow (S2F) model is attracting attention because it signals that Bitcoin may be preparing for a fresh phase transition that stabilize its price above $100,000. The S2F model, originally developed for commodities such as gold and silver, measures the existing supply of a given asset relative to the rate of fresh units entering the market. For BTC, the S2F model calculates the shortfall by taking into account a fixed supply of 21 million BTC along with a block reward halving that reduces fresh supply every four years.

Each halving event reduces the emissions rate, creating a growing scarcity that the model correlates with price increases. According to the S2F chart provided by Plan Bthese halvings led to price increases in the following months, and the S2F model accurately predicted Bitcoin’s transitions to fresh price levels.

The last halving occurred in April 2024, which resulted in the block reward dropping from 6.25 BTC to 3,125 BTC. According to the S2F chart, previous Bitcoin halvings have always started the price transition to a fresh phase. For example, the 2020 halving marked the beginning of a transition to a fresh phase above $10,000, which culminated in BTC reaching its previous all-time high of around $66,000.

Now that the April 2024 halving is six months behind us, its effects are starting to be factored into Bitcoin supply and demand. As such, Bitcoin is watching prime for phase transition over $100,000.

What does this mean for the price of Bitcoin?

Since previous phase transitions have occurred, a phase transition above $100,000 would perpetuate Bitcoin’s price above that level. With the $100,000 price level currently serving as a price floor, this would provide support for the Bitcoin price to continue to rise in the coming months.

Previous phase transitions always led to a fresh high before the next halving. The projected peak at this stage is just under $1,000,000. If current trends hold true, Bitcoin’s price could reach this impressive milestone before the next halving, which is expected to occur in 2028.

At the time of writing, Bitcoin is trading at $68,340.

Featured image created with Dall.E, chart from Tradingview.com