Bitcoin's 2022 Bear Market Has Broken The Community's Most Popular Price Models

The 2022 bear market has been brutal as more than $2 trillion in value has been wiped away from the crypto economy. In addition to record values lost, the crypto winter has managed to break a number of popular bitcoin price models like the rainbow price chart and Plan B’s infamous stock-to-flow model. Moreover, since May 11, 2022, the well known power-law corridor model or logarithmic growth curves chart has also broken, and it’s deviated below the lower band for roughly 86 days.

A Deviation From the Norm: 2022’s Bitcoin Bear Market Breaks Some of the Most Popular Price Models

For many years now, crypto traders have leveraged tools, charts, and models to predict the future value of bitcoin (BTC) and other popular digital assets. Bitcoin.com News has written about Plan B’s stock-to-flow (S2F) price model on many occasions and in 2021 the S2F model was fairly accurate up until the end of November.

Additionally, many bitcoiners count on other charts and price models like the golden ratio multiplier, the Fibonacci sequence, the rainbow model, and logarithmic growth curves. During the last quarter of 2021, bitcoin traders expected BTC to reach $100K per coin by the year’s end.

Rainbows, Log Charts, and S2F: Bitcoin's 2022 Bear Market Has Broken the Community's Most Popular Price Models — BTC/USD weekly chart via bitcoinwisdom.io on August 5, 2022.

In September 2021, when BTC was swapping for prices between $45K and $50K, the lead insights analyst at Blockware Solutions, Will Clemente, tweeted about a new price model he called the “Illiquid Supply Floor.” At that time, Clemente said the model combined Glassnode’s illiquid supply data with Plan B’s S2F model and said it created a bitcoin floor price based on BTC’s real-time scarcity.

The floor value Clemente predicted was $39K and as time passed the analyst’s Illiquid Supply Floor model broke. Even after Plan B’s S2F “worst-case scenario” prediction deviated at the end of November, the pseudonymous analyst said he was confident that bitcoin’s price was still “on track towards $100K.”

None of these bold predictions came to fruition, and amid the start of the crypto bear market, these types of price models were openly mocked and denounced by many people in the crypto community. The Illiquid Supply Floor was not solid, S2F broke, and people made fun of the popular “Rainbow” price indicator.