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The crypto strategist popular for applying the stock-to-flow (S2F) ratio to Bitcoin reveals that the model has printed a BTC buy signal that has not been seen since the crypto bull run in 2017.

In a viral tweet, the anonymous analyst known as PlanB provides a crucial update to the S2F model for his 105,000 Twitter followers.

The S2F model compares the amount of commodity in circulation divided by the amount produced every year. The model is traditionally used to analyze the intrinsic value of precious metals such as gold and silver.

PlanB’s model shows that Bitcoin’s stock-to-flow ratio increases as the rate of new BTC supply decreases over time. The crypto analyst also illustrates how the value of Bitcoin closely follows the cryptocurrency’s S2F ratio using dots, which represent the monthly closing price of BTC.

The first red dot after a series of blue dots signifies the first month after each halving, an event that reduces the pace of new BTC entering circulation.

The chart shows that Bitcoin’s S2F ratio has increased and now coincides with the appearance of the red dot in PlanB’s model – the first such dot in three years. Based on PlanB’s chart, a red dot indicates the start of a new bull cycle.

In other trending Bitcoin News today:

Goldman’s Eerie Yuan Crash Prediction Bolsters Bitcoin Bullish Outlook in June

With halving in rearview, Bitcoin traders are now looking at their next potential bullish narrative: a weakening yuan.

That’s because the cryptocurrency tends to move positively when the Chinese currency falls. Last year, the 30-day inverse correlation between both the assets reached a record high. Dr. Garrick Hileman, the head of research at Blockchain, told Bloomberg that Chinese investors were buying

Bitcoin as a safety net against the then-escalating U.S.-China trade war.

“There’s corroborating evidence for this, in that people in Asia were paying more for Bitcoin than elsewhere when the yuan fell,” he said in September 2019.

The fractal is now playing all over again. Bitcoin is up 32.13 percent on a year-to-date timeframe. On the other hand, yuan fell to its lowest level in eight months. Meanwhile, the only thing that appears to be relating their opposite moves is a freshly brewing tensions between the U.S. and China.

The animosity flared over Beijing’s decision to slap a new security law in Hong Kong. That prompted the West to say that the former British territory was no longer an autonomous region. Top Washington officials, including Donald Trump, expressed their doubts over Hong Kong’s future as a global commercial and financial hub under a communist regime.

The rising geopolitical issue spilled over yuan as the currency started trading for 7.17 per dollar on Friday morning. That prompted the People’s Bank of China to intervene and set yuan’s daily central parity rate more robust in the onshore spot market. While yuan recovered, the rebound, more or less, looked artificial.

Analysts at Goldman Sachs spotted these uncertainties. In a note published Sunday evening, strategist Zach Pandl said that the rising U.S.-China tensions could lead yuan further lower in the next three months. He predicted that the currency would fall to 7.25 per dollar by the end of August 2020.