Bitcoin has fallen to the lower boundary of the Power Law model, a level that has historically preceded significant price rebounds. According to the model, popularized by physicist Giovanni Santostasi and refined by Porkopolis Economics, bitcoin's price follows a long-term mathematical trend similar to natural growth patterns, decelerating over time. Current data from checkonchain shows that bitcoin has been more expensive relative to this model for 95.6% of its trading history. Previous visits to this level occurred during extreme market stress, such as the March 2020 COVID-19 crash and the November 2022 FTX collapse, both of which were followed by strong recoveries. While the Power Law does not guarantee a floor, long-term investors see this as a sign that bitcoin is trading at one of its deepest historical discounts, suggesting potential for upside. The observation comes amid broader market weakness, with U.S. spot bitcoin ETFs seeing outflows and over $1.5 billion in liquidations.

Key facts

• Bitcoin trades near Power Law corridor lower bound, previously seen before rebounds.
• Model shows BTC at deepest discount relative to trend for 95.6% of history.
• Similar levels occurred during March 2020 crash and FTX collapse.
• Power Law predicts long-term growth deceleration, unlike cycle-based models.
• No guarantee of floor, but historically followed by significant recoveries.

KeyAudit data perspective