Indicator Overview

The Difficulty Fair Value is a fundamental valuation metric that treats Bitcoin’s network difficulty as the ultimate expression of the asset’s production floor and energy-backed value. By mapping the exponential growth of mining difficulty through a quadratic log-regression, the indicator creates a "Difficulty-Price Anchor" that visualises the historic relationship between the cost of securing the network and Bitcoin’s market price.

The core of the indicator tracks the evolving "Fair Value". As difficulty rises, the floor value accelerates to account for hardware evolution and hash rate competition. This model specifically identifies the points where market price meets the production fair value.

How To Use

Traders and long-term investors can use the Difficulty Fair Value to distinguish between speculative price discovery and fundamental network support.

• The Accelerator Floor: The main trend line represents the network's fair value. Unlike linear models, this line uses an Acceleration Factor to account for the increasing complexity of the network.

• Support & Resistance Analysis: The indicator serves as a dynamic fair value. Historically, the BTC price tends to oscillate around the Difficulty Fair Value, as miners become unwilling to sell below the cost of production.

• MA Smoothing: The Moving Average (SMA) toggle allows you to apply a 30-day, 200-day, or 1-year smoothing to the floor. This is particularly useful for filtering out the bi-weekly difficulty adjustments, providing a clearer look at the long-term trend of Bitcoin’s fundamental valuation.