After briefly dipping below $66,000 on Wednesday, bitcoin is trading near the bottom of the Power Law Corridor, a level that has historically come shortly before rebounds in the price of the largest cryptocurrency.
The model, popularized by physicist Giovanni Santostasi and refined by Porkopolis Economics, plots bitcoin’s price against time on a logarithmic scale and suggests that growth naturally slows as the network matures. It has tracked bitcoin’s price trajectory for more than a decade.
Unlike traditional cycle-based models that focus on the rate at which new bitcoin is created – it is cut by 50% about every four years – the Power Law claims that bitcoin follows a long-term mathematical trend, similar to patterns observed in nature, where growth slows over time.
According to checkonchain data, the Power Law Oscillator shows that measured against the model, bitcoin has been more expensive than today for about 95.6% of its trading history.
Previous visits to these levels have coincided with periods of extreme market stress, including the pandemic-driven sell-off in March 2020 and the collapse of crypto exchange FTX in November 2022. Both events pushed bitcoin towards the lower edge of the model before significant recoveries followed.
While the Power Law offers no guarantee that the floor will hold again, long-term investors see the current reading as a sign that bitcoin is trading near one of its deepest historical discounts to the trend.
