Bitcoin is trading near the bottom of the Power Law corridor after briefly falling below $66,000. This level has historically preceded significant price rebounds for the largest cryptocurrency.
The Power Law model, developed by physicist Giovanni Santostasi and refined by Porkopolis Economics, tracks bitcoin’s price against time on a logarithmic scale. Unlike cycle-based models that focus on the halving of new supply every four years, the Power Law suggests growth decelerates naturally as the network matures, similar to patterns observed in nature.
According to checkonchain data, the Power Law Oscillator indicates bitcoin has been more expensive than it is today for roughly 95.6% of its trading history. Previous visits to this deep discount occurred during the March 2020 pandemic-driven selloff and the FTX collapse in November 2022. Both times, bitcoin staged strong recoveries.
Long-term investors see the current reading as a sign that bitcoin is trading near one of its deepest historical discounts relative to trend.