Stock to Flow Reversion
Stock to Flow (SF) Reversion is defined as a ratio of the price of BTC divided by SF ratio.

# Definition

Stock to Flow (SF) Reversion is defined as a ratio of the price of BTC divided by SF ratio.
$\text{SF Reversion} = \frac{\text{Price of BTC}}{\text{SF Ratio}}$

# Interpretation

SF reversion is an indicator that measures the relative difference between the market price and SF ratio. SF ratio so far correctly estimates the price trend, which means the price deviation from SF ratio can be an opportunity to bet. If SF reversion is too high compared to the price, the market price would be corrected soon, meaning a bearish moment.

# Use Case

## Predicting market tops and bottoms

We first build a linear regression model of SF reversion to the price to align two variables. After aligning both in a single graph shown below, we can clearly see the deviations of SF reversion to the price and those points clearly indicate bullish (green boxes) and bearish (red boxes) regimes respectively.