As Bitcoin tests the support level of $112,000 again on September 24, market sentiment shows subtle changes. Despite short-term price fluctuations, institutional holdings of Bitcoin have surpassed 1 million coins, marking a historical milestone.
At the same time, it accurately predicted the long-term Bitcoin price trend. The S2F model is facing new market environment challenges. This article will delve into the applicability of the S2F model under current market conditions, as well as the relationship between Bitcoin’s scarcity value and price performance.
01 Market Status: Bitcoin is fluctuating at a high level, with key support levels facing tests.
In the fourth week of September, the Bitcoin market exhibited significant volatility characteristics. After attempting to break through the resistance level of 118,000 dollars, the price fell back, and as of September 24, the trading price of BTC was contending around the critical support level of 112,000 dollars.
Technical analysis shows that Bitcoin is currently below $114,000 and the 100-hour simple moving average, forming a short-term bearish trend line, with resistance around $113,600. The $112,000 level has become the focal point of contention between bulls and bears.
On the upside, if the price can break through the resistance level of 114,000 USD, it may test the level of 114,750 USD. On the downside, if it falls below the support of 112,000 USD, the next key support level is around 111,000 USD, and further decline may test 110,500 USD or even 108,800 USD.
At the same time, there has been a large-scale liquidation of long positions in the market. Data shows that when Bitcoin price When it fell below $113,000, approximately $110 million in long positions were liquidated, indicating that high-leverage positions are particularly vulnerable in the current market environment.
02 Stock-to-Flow Model: A Bitcoin Valuation Framework for Quantifying Scarcity
The Stock-to-Flow model was proposed by the anonymous analyst PlanB, aiming to assess the value of an asset through its scarcity. The core logic of the model is that there is a positive correlation between the scarcity of the asset (measured by the S2F ratio) and its value.
The S2F ratio calculation formula is: asset stock (current circulating total) divided by asset flow (annual production). The higher the ratio, the more scarce the asset.
The S2F ratio of Bitcoin significantly increases after the halving in 2024. Currently, the annual inflation rate of Bitcoin has dropped to about 1.7%, lower than the inflation targets of many developed countries’ central banks, making it a truly scarce asset.
According to the S2F model, with each halving event, the scarcity of Bitcoin increases, and its value should rise accordingly. This model has accurately predicted the long-term price trends of Bitcoin multiple times in history, especially during the period of 2020-2025.
03 Models and Reality: The Applicability of the S2F Model in the Current Market Environment
Although the S2F model provides valuable references for the long-term price trend of Bitcoin, short-term price fluctuations are influenced by various factors. Recent market dynamics indicate that increased institutional participation is changing the price discovery mechanism of Bitcoin.
The total amount of Bitcoin held by publicly listed companies has exceeded 1 million coins, and this milestone event indicates that Bitcoin’s positioning as a value storage asset is gaining broader recognition.
At the same time, the market structure is also changing. On September 23, Ethereum’s trading volume surpassed Bitcoin for the first time, which may indicate that funds are rotating into the Ethereum ecosystem, potentially affecting Bitcoin’s short-term performance.
Macroeconomic factors cannot be ignored either. The Federal Reserve announced its first interest rate cut in September 2025, a typical catalyst for risk sentiment that initially pushed Bitcoin up to $118,000, but profit-taking later caused the price to fall back.
04 Market Divergence: Altcoin Performance Highlights Bitcoin’s Relative Stability
While Bitcoin is fluctuating at a high level, the Altcoin market has shown significant differentiation. Data from September 24 indicates that some Altcoins have experienced sharp declines, with 0G dropping by 11.84% and IP falling by 10.95%.
At the same time, some Altcoins with clear application scenarios have performed strongly, such as FEAR coin, which rose nearly 45% in a single day. This differentiation indicates that the market is shifting from pure speculation to a greater focus on project fundamentals.
Bitcoin has shown relatively stable performance in this market environment, with a 24-hour decline of only 0.85%, far lower than the declines of many high-risk Altcoins. This confirms the gradual consolidation of Bitcoin’s position as a stability asset in the cryptocurrency market.
05 Investment Strategy: Using the S2F Model for Decision Making in Volatile Markets
For long-term investors, the S2F model still provides a valuable reference framework. Based on this model, the following strategies can be considered:
- Position Allocation: Use Bitcoin as a core component of the cryptocurrency investment portfolio to reduce overall volatility risk by leveraging its relatively stable characteristics.
- Investment Strategy: Gradually build positions near key support levels (such as $112,000) to avoid the market timing risk of a lump-sum investment.
- Risk hedging: Focus on the rotation opportunities between Bitcoin and Altcoin, and appropriately reduce holdings in high-risk Altcoins when Bitcoin is strong.
Although the S2F model mainly focuses on long-term trends, investors should also pay attention to short-term technical indicators. For example, the Relative Strength Index (RSI) is currently in the neutral zone, indicating that the market may soon choose a direction.
At the same time, on-chain data provides another perspective. The increase in institutional holdings and the trend of long-term investors continuing to accumulate corroborate the long-term bullish outlook of the S2F model.
Future Outlook
Observing the market data from September 24, the battle around Bitcoin at approximately $112,000 is not yet over. The technical indicators suggest that if this support can be maintained, the upward target may range between $115,000 and $118,000; however, if it is lost, it could potentially drop to the support levels of $111,000 or even $109,000.
In the long run, as the next Bitcoin halving event approaches, its S2F ratio will further increase. Against the backdrop of continuous institutional inflows, the scarcity value of Bitcoin may become even more prominent.
