About Power Law

The Power Law Dashboard offers a macroeconomic lens on Bitcoin's long-term valuation trajectory by mapping its historical price action against rigorous non-linear mathematical frameworks. Unlike traditional linear charting, this suite applies the **Log Growth** model and the **Power Law** regression to account for the asset's naturally decaying volatility and compounding network adoption over time. By mathematically projecting these regression bands forwards, analysts can dynamically forecast peak-cycle targets and structural bear market floors years in advance. This suite separates cycle analysis into four distinct modalities. The foundational Power Law and Log Growth views map spot price against mathematically derived fair-value baselines, allowing users to toggle between Base, Bull, and Bear coefficients. The PL Drawdown view isolates periods of extreme undervaluation by measuring the precise percentage deviation below the primary model, highlighting historical accumulation zones. Finally, the bespoke Log Risk framework normalises these historical deviations using a strict time-decay algorithm. This creates a symmetrical 0-100% risk gauge that mathematically adjusts for the fact that early-cycle volatility will never be replicated as the aggregate **Market Cap** expands. By standardising these extremes, investors can objectively size positions based on true statistical risk rather than absolute dollar prices.

Signal Zones

Trading Signals by Regime

How It Is Calculated

Frequently asked questions

What is the difference between the Log Growth and Power Law models?

Both models project long-term price action using time as the primary input. The **Log Growth** model applies a specific decay factor to map curving, diminishing bounds, whilst the **Power Law** model uses a straight linear regression on a log-log scale to establish a central fair-value baseline.

Why does the Log Risk metric use a time-decay algorithm?

In 2011, a 10x deviation from fair value required very little capital, resulting in massive percentage swings. Today, moving the **Market Cap** by the same percentage requires trillions of dollars. Time-decay mathematically normalises these eras so an 80% risk score today means the exact same thing it did a decade ago.

How should I interpret the PL Drawdown metric?

The PL Drawdown exclusively measures periods where Bitcoin is trading below its fair-value baseline. Unlike standard price drawdowns from all-time highs, this metric reveals deep structural undervaluation. A drawdown below -50% has historically marked the absolute floor of a bear market.

Can I trust the future projections shown on the chart?

The projections are rigorous mathematical extrapolations of the last 15 years of data. However, they represent statistical probabilities, not guarantees. Investors should use them to define realistic macro targets rather than precise, date-specific price predictions.