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Bitcoin's Stock-to-Flow Reversion model hit 1.1, signaling potential undervaluation, as Binance saw negative ERC-20 stablecoin netflows of -$89.3M.
Bitcoin's Stock-to-Flow (S2F) Reversion model, which tracks price deviation from its scarcity-based fair value, recently registered 1.1, approaching a level historically associated with extreme undervaluation and bottom formation [1]. This signal coincides with a significant shift in stablecoin liquidity, as Binance recorded negative netflows of ERC-20 stablecoins totaling -$89.3 million, indicating capital is exiting the exchange rather than accumulating as "dry powder" for potential buys [1].
| At a glance | |
|---|---|
| S2F Reversion Model | 1.1 (approaching undervaluation) [1] |
| Binance Stablecoin Netflow | -$89.3M (negative) [1] |
| Bitcoin Price (snapshot) | ~$59,500 [1] |
| Catalyst | Stablecoin outflows, S2F model reading [1] |
The Stock-to-Flow (S2F) model, popularized by pseudonymous analyst "PlanB," estimates Bitcoin's price based on its scarcity, specifically its circulating supply ("stock") divided by new supply created annually ("flow") [2]. A higher S2F ratio suggests greater scarcity and, theoretically, higher value, similar to its traditional use for precious metals like gold and silver [2]. Bitcoin's "flow" is uniquely programmed by its code, with new supply halving approximately every four years, making its supply perfectly inelastic to price changes [2].
The S2F Reversion model, a derivative indicator, measures how far Bitcoin's price deviates from the S2F model's implied fair value [1]. A reading of 1.1 is near the "green zone" (below 1), which has historically marked market bottoms before trend reversals [1]. For instance, the model last dipped below 1 in September, when Bitcoin traded around $57,000 [1]. In contrast, readings above 2.5 to 3 have typically coincided with short-term market tops, as seen during the 2021 and 2024 peaks [1].
This S2F signal emerges as Binance, a major exchange, experiences negative netflows for ERC-20 stablecoins, with $89.3 million more stablecoin value leaving than entering [1]. This contrasts with earlier periods where stablecoins were seen as capital waiting to enter the market [1]. CryptoQuant analysis suggests this outflow could indicate increased caution, reduced trading activity, or capital moving to other platforms [1]. These stablecoin outflows have also coincided with weeks of outflows from spot Bitcoin ETFs and net BTC inflows of +91,000 BTC to exchanges [1].
The current S2F Reversion reading and stablecoin dynamics are occurring alongside other indicators suggesting a potential market floor. Whale accumulation has recently spiked to historic levels, even as retail investors have been selling [1]. Additionally, Bitcoin's Power-Law Quantile recently dropped to 6.2%, a zone that previously appeared at cycle bottoms in 2015, 2020, and 2023 [1]. While these indicators converge, confirmation of a definitive bottom has not yet arrived [1].
The convergence of the S2F Reversion model nearing undervaluation and persistent stablecoin outflows from a major exchange suggests a critical juncture for Bitcoin's price action, with the potential for either a final capitulation wave or the beginning of a recovery depending on the return of sidelined capital [1].
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Jul 9, 2026 · How we report
It is a mathematical ratio calculated by dividing the total existing supply of an asset (stock) by the amount of new supply produced annually (flow).
Halving events reduce the block reward for miners by 50%, which lowers the annual flow of new Bitcoin and increases the S2F ratio, theoretically signaling higher scarcity.
While it was influential in earlier cycles, its predictive accuracy has weakened as Bitcoin's price has frequently deviated from the model's projections, leading many to use it as a historical reference instead.
The model is applied because Bitcoin has a limited, code-defined supply schedule, making it comparable to scarce physical commodities like gold.