PlanB, the well-known creator of the contested stock-to-flow (S2F) model, believes Bitcoin (BTC) is now well on track to reach $100,000 as the price has risen to yearly highs. The optimistic sentiment coincides with the shift in momentum from alternative cryptocurrencies, or altcoins, to BTC.


He said:



“I can't make a chart for you now (at sea), but S2F model perfectly on track.”



At the same time, the price of Bitcoin has increased by 17% this week, as it broke through a major three-year trendline. As Cointelegraph reported, traders seemingly expect BTC to test higher resistance levels in the near term.


The price of Bitcoin surpasses $11,700 in a swift intraday rally


The price of Bitcoin surpasses $11,700 in a swift intraday rally. Source: TradingView.com


Data shows it might be the time for Bitcoin to shine



Altcoin declined particularly in the past 72 hours when the price of Bitcoin started to rally. Ethereum’s Ether (ETH) moved in tandem with BTC throughout the rally, but it slumped against BTC in the past two days.


In
the short term, as Bitcoin sees a profit-taking rally from altcoins,
some investors expect BTC to outperform altcoins. Kelvin Koh, the
co-founder of Asia-based venture capital firm Spartan Group, said:



“If BTC breaks the resistance at $11.4K, we are going above $12K in no time. Will take the wind out of alts again short term.”



The
pattern of a Bitcoin rally following a strong altcoin season is not
new. In previous cycles, the top cryptocurrency typically saw a sharp
uptrend after altcoins initially gained against BTC. Such a trend
materializes because investors seek safer options, like BTC, when the
altcoin market gets overheated.


Most recently, the fear of missing out, or FOMO, of retail investors around DeFi led small market cap tokens to surge substantially. In the early days of the DeFi market craze, for example, Compound (COMP) saw a major rally. Then, smaller tokens, including Yearn Finance (YFI), Synthetix Network (SNX), and Aave (LEND), followed.


Eventually,
as small tokens saw five to ten-fold spikes in price, investors started
to take profit. The abrupt pullback of DeFi tokens coincided with a BTC
rally as momentum shifted back to Bitcoin.


Traders say the trend is still up



Data
from Skew shows that tens of millions of dollars worth of short
contracts are still getting liquidated. It indicates that a relatively
large number of investors are betting against BTC in the near term.

Bitcoin liquidations on BitMEX


Bitcoin liquidations on BitMEX. Source: Skew


Cryptocurrency
trader Cantering Clark said that while he understands why shorts are
compelling, the upward trend is too strong. He said:



“Looking
at trades from the standpoint of R:R is good, but understanding context
is superior. After a major contextual change like this, you can assume
that your shorts have a lower probability of resolving successfully.
Bets should be on strength always showing up.”



For
some traders, a short against Bitcoin could be attractive because BTC
has increased steeply in the past week and is testing major resistance
levels. 


A 17% rally in six days — even during a bull
market — is substantial, even for Bitcoin. But when the trend of BTC is
overwhelmingly bullish, a short squeeze could only add more rocket fuel.


In
the last 12 hours, more than $23 million worth of shorts were
liquidated, for example, as the price hit as high as $11,750. Thus,
during a strong upward price trend, shorts could indirectly catalyze a
larger rally.