Power Law

Plot Bitcoin's price against its age with both axes stretched logarithmically, and the price history straightens out. A straight line on that kind of chart means growth that keeps slowing in percentage terms while still compounding, which is the same shape that describes how cities and networks grow as they get bigger.

The line through that history is the fair-value level. Price has spent its whole life swinging around it rather than sitting on it, so the indicator also draws a corridor: a floor beneath the line and a ceiling above it. All three levels use the published constants this indicator is known by, so the numbers here are the same ones its reference charts draw rather than a fit of our own.

What makes this different from the other indicators here is that it uses no market data at all beyond the price itself. There is no supply schedule, no on-chain cost basis, no moving average of recent trading. The only input besides price is the calendar.

The chart draws three levels against price: the floor, the fair-value line, and the ceiling. Price above the fair-value line is the high-risk read, price below the floor the low-risk one, and anywhere between the two is the middle ground where price spends the overwhelming majority of its time. Only the floor and the fair-value line are scored. The ceiling is drawn for context.

The corridor is wide, and deliberately so. It is not a precise target but the range Bitcoin has essentially always traded inside, so its value is in showing how far from ordinary the current price is rather than in calling a turn. The floor in particular is a deep level: price reaching it at all is the rare event, which is what makes it worth marking.

The fair-value line rises every single day, because the elapsed time on its x-axis only ever goes up. A price that stands still therefore drifts down through the corridor on its own.

The floor has been reached only at the very deepest points of capitulation, and then usually for a single day before price lifted off it. Most cycle bottoms have stopped short of it entirely, some by a wide margin. Reaching the floor is therefore an unusual reading rather than a routine feature of a bear market.

The ceiling has never been reached. The earliest cycle peak came within a percent of it, and every peak since has fallen further short, because the overshoot above fair value has shrunk with each successive cycle while the ceiling line stays where it is. Read it as the outer bound of the historical record, not as a level price is expected to revisit.

Price has crossed above the fair-value line in every cycle, and spends a large share of its time there, so that edge marks elevated valuation rather than an extreme.

The constants are fixed rather than refitted as new price history lands. That keeps the line stable and keeps it matching the published version of this indicator, but it also means the line does not adjust if Bitcoin's growth genuinely departs from the trend the constants were derived on.

A straight line through past growth is a description, not a mechanism. Nothing forces Bitcoin to keep following it, and the further out the line is extended the more weight it puts on the assumption that the last era resembles the next one.

The corridor is drawn from how far price has strayed to date. A move genuinely larger than anything in the record would sit outside it, and because the constants are fixed the corridor would not widen afterward to absorb it.

The trend is drawn from Bitcoin's earliest and most volatile years as well as its recent ones. Those early points sit at the far left of a logarithmic time axis and carry real weight in where the line ends up.