Bitcoin's price has followed a power law over its entire 15-year history. The power law describes Bitcoin's "fair value" at any point in time based on how long the network has existed. The Power Law Deviation measures how far the current price sits above or below this trend line — expressed as a natural log ratio.
A value of 0 means price is exactly at the power law fair value. A value of +0.5 means price is approximately 65% above fair value. A value of −0.5 means price is approximately 39% below fair value.
The chart shows the deviation line coloured by zone, alongside the BTC price overlay (right axis). The hero signal shows how far the current price sits above or below the power law fair value as a plain percentage for easy interpretation.
≤ −0.5 — Deep Value — Bitcoin is more than 39% below its long-term power law fair value. Historically, readings this deep have appeared near major bear-market lows and marked some of the strongest long-term accumulation windows in Bitcoin's history. They do not guarantee a bottom, but they suggest that the market has significantly undershot its long-term trend.
−0.5 to −0.2 — Undervalued — Bitcoin is below the power law fair value but not at an extreme. These readings have typically appeared during late bear markets and early recovery phases, when conditions were gradually improving. Long-term investors often treat this zone as a cautious accumulation environment.
−0.2 to +0.4 — Fair Value — Bitcoin is near its long-term power law trend. This is the historical equilibrium zone — price is neither extremely cheap nor extremely expensive relative to its long-term trend. No clear directional signal; the broader market context determines the next move.
+0.4 to +0.8 — Elevated — Bitcoin is running clearly above its power law fair value. This is consistent with an active bull market phase where momentum and optimism drive prices beyond the long-term trend. Extended periods in this zone are normal during Bitcoin bull cycles and do not alone signal a cycle top.
≥ +0.8 — High Risk — Bitcoin is significantly above its power law fair value. Historically, readings this extreme have appeared near cycle tops where price has run far ahead of the long-term trend. Long-term investors often become more selective with large new allocations at these levels.
The power law regression used here is the same model underlying the Rainbow Chart and the AHR999 Index. It is computed entirely from Bitcoin's price history with no on-chain data required — making it one of the most durable long-term valuation tools available.
The information on this page is for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making any investment decision.