Five reasons to tell you why Bitcoin has entered a bull market

The price of Bitcoin could surge to $100,000 in just over two years. A popular cryptocurrency analyst has given five reasons why the price of Bitcoin could surge.

DataDash, a popular YouTube content creator, believes that Bitcoin has entered a long-term bull cycle. He bases his view on several factors, including the famous stock-to-flow (S2F) model, the growing hoarding mentality of investors, and the issuance of new coins.

Bitcoin breaks through resistance level

According to Nicholas Merten of the popular YouTube channel DataDash, Bitcoin's recent performance solidifies the upcoming bull run. He first examined the resistance level of Bitcoin for nearly three years starting from the all-time high in December 2017. After December 17, the price of Bitcoin has been unable to exceed the resistance line, but it broke through the resistance line this week. Merten called it "a big moment for Bitcoin. Even from a weekly perspective, we are in a bull market."

BTC/USD weekly chart. Source: TradingView

Bitcoin’s Expansion Cycle

Merten also looked at the monthly chart, which covers a longer period of time. He believes that Bitcoin does not follow a halving cycle every four years as most people think. He believes that the price of Bitcoin follows an expanding cycle.

The first such cycle occurred around 2010, when “we started getting real price data for Bitcoin, real trading volume, and the first major exchanges started listing Bitcoin.” The first cycle lasted 11 months. Each subsequent cycle added about a year (11-13 months), making each cycle longer, so I call it an “expansion cycle.”

The second cycle was from October 2011 to November 2013, and the third cycle ended in December 2017 when the price of Bitcoin reached its all-time high of $20,000. Bitcoin's current cycle began at the end of the 2019 bear market and will end around "November 2022."

Merten noted:

Let's take a look at the logarithmic chart below. Bitcoin's price resistance line will bend over time, and the next bull market high will be around $100,000.

Bitcoin expansion cycle data. Source: YouTube

S2F Model

Merten also talked about the famous stock-to-flow (S2F) model. Stock represents the size of the existing Bitcoin inventory (or reserve), while flow is the annual supply of Bitcoin on the market. Bitcoin is halved approximately every four years, which reduces the number of newly mined Bitcoins by half. Based on Bitcoin's stock-flow ratio, the asset price of Bitcoin may indeed soar to $100,000 per coin in a few years.

Many people began to criticize the S2F model after the third halving in May this year, because the price of Bitcoin did not rise immediately after the halving. In this regard, Merten pointed out that according to historical data, the price of Bitcoin sometimes soars months or even years after the halving occurs.

He said:

When we look back at previous halving events, we can see that the rise in Bitcoin prices is increasingly experiencing delayed effects. In November 2017, in the previous cycle, the price of Bitcoin began to gradually exceed the red line in the S2F model chart, which represents the price of Bitcoin.

Bitcoin S2F model. Source: LookIntoBitcoin

Hoarding helps Bitcoin prices rise

In addition, more and more Bitcoin investors are starting to hodling is another sign of rising Bitcoin prices. The "hodling curve" below shows that the number of Bitcoins that have not been moved for at least a year has reached a record high.

Hoarding Curve. Source: LookIntoBitcoin

62% of all Bitcoin has not moved in a year or more. Merten stressed the importance of this for the price because it means people prefer to hold their coins rather than spend or sell them.

He said:

As more and more investors, such as Grayscale or other different institutional players, start acquiring more Bitcoin, the liquidity of Bitcoin in the market starts to become insufficient.

Puell Multiple shows Bitcoin is undervalued

The Peeler Multiple metric divides Bitcoin's daily issuance (the number of newly mined Bitcoins added to the ecosystem by the miners) by the 365-day moving average of the daily issuance. According to Merten, this data is quite accurate in predicting Bitcoin's price tops and bottoms. And, since Bitcoin's price is currently at a relatively low level, this may be further evidence that Bitcoin's price is currently undervalued.

Peeler Multimetric. Source: LookIntoBitcoin

Merten explained that ultimately all of the above factors support that Bitcoin is heading for a major bull run:

When the supply of Bitcoin decreases due to halving, the price of the currency rises, resulting in continued strong demand for buying the currency, and more and more investors begin to hoard the currency, the price of Bitcoin is likely to increase many times.

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