Bitcoin Stock-to-Flow (S2F) Reversion Chart Signals Prime Buy Opportunity as BTC Price Nears $65k

As Bitcoin price approaches the $65,000 valuation, the asset has attracted the attention of market analysts, with one analyst recently highlighting a key indicator that suggests further recovery potential for BTC price.

Specifically, the Bitcoin Stock-to-Flow (S2F) reversal chart is currently pointing to a major buy signal for Bitcoin, according to a recent post by an analyst with the pseudonym Darkfost on the CryptoQuant Quicktake platform.

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S2F Signal First Order Buying Opportunity

The S2F model is widely used to predict Bitcoin price by measuring its scarcity. It shows whether the market is leaning towards a buying or selling zone based on the supply rate.

Darkfost explained that the S2F retracement chart currently has an SF ratio falling below 1, representing a green zone, indicating a potential buying opportunity signal.

This zone indicates that Bitcoin may be undervalued compared to its historical trend and is a potential time to accumulate BTC.

The analyst stated that Bitcoin last entered this buying zone in June and September 2023, and then there were significant price recoveries.

Investors who took positions during these periods achieved positive returns as the Bitcoin price rose in the following months.

In particular, the predictive nature of the S2F model has often been an important tool for traders looking to capitalize on long-term Bitcoin trends. When the SF ratio falls below 1, it signals a buy signal, while when it rises above 1, it indicates a red zone or profit-taking opportunity.

Bitcoin Price Action and Key Technical Levels

In addition to the S2F signal, Bitcoin price has also been affected by recent macroeconomic events such as the price movement over the past few days, especially the interest rate cut by the US Federal Reserve.

Bitcoin jumped above $64,000 earlier today after the Federal Reserve cut interest rates by 50 basis points on Wednesday, marking a significant upside given the asset's previously bearish trend and accumulation phase.

But as of now, the cryptocurrency has pulled back slightly from its 24-hour high of $64,000 and is trading at $63,036, down just 0.1% over the last day.

Meanwhile, although the S2F retracement chart points to a potential buying opportunity, another crypto analyst, Ali, expressed concerns about Bitcoin's near-term future.

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In a recent post on X, Ali highlighted Bitcoin's current position relative to its 200-day Simple Moving Average (SMA), a critical indicator in determining the strength of the market trend. Bitcoin is currently testing this level, which has historically been a critical factor in confirming a bull run.

Ali noted that previous failures to reclaim this level, as seen in 2020, 2018 and 2014, led to significant price corrections. If Bitcoin fails to find support above this level in the coming days, this could signal a broader market decline.

However, if support is established, Bitcoin could continue its upward trajectory, paving the way for further gains.

Featured image created with DALL-E, Chart from TradingView

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