The Stock-to-Flow (S2F) model, popularized by analyst PlanB, has received as much a wave of initial admiration as subsequent criticism.

Recently, the creator of this famous model published his latest long-term chart called Bitcoin Market Stages.

The main conclusion of the Bitcoin Market Stages is that the largest cryptocurrency has entered a new bull market as of early 2023. As PlanB explains in a YouTube video, the new model is based on only one on-chain variable. However, he does not reveal which metric he is referring to.

The analyst then adds that Bitcoin Market Stages is not a predictive or valuation model (like Stock-to-Flow, for example). Its sole purpose is to try to estimate (detect) what stage of the market cycle Bitcoin is in. PlanB highlights the advantages of its new model in simple terms:

“It’s my favorite chart after Stock-to-Flow, because it’s very simple, intuitive, and useful.”

Bitcoin Market Stages: The Market Moves in Cycles

The basic premise of Bitcoin Market Stages is that every market (including cryptocurrencies and Bitcoin) moves in cycles. Moreover, these cycles are based on mathematical and fractal similarities, which are nothing more than a quantitative representation of human psychology.

The analyst believes that “the emotions associated with the phase of the cycle can tell you something completely different; therefore, it is important to know which stage of the cycle you are in.” Hence the idea for the Bitcoin Market Stages chart – to make his followers aware that the market often shows something fundamentally different from our emotions.

PlanB’s new model is very simple and assumes that the market cycle contains 4 consecutive phases or stages:

• Early bull market (blue)
• Late bull market (green)
• Early bear market (yellow)
• Late bear market (red)

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Author: Jakub Dziadkowiec

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