Bitcoin must recover by the end of the year or the power law will be invalidated.
Power law models are not predictions. This is a time-based regression that treats Bitcoin’s long-term price trend as a power curve, and the “deadline” talk focuses on the rise of the lower bound. Even better is a lower band that rises every day, regardless of price.
If Bitcoin chops sideways or sells off through the fall, that floor will eventually catch up with the price, creating the first headline break in a model that has held throughout the asset’s history.
As of mid-February 2026, Newhedge’s live power law tracker shows a central trendline near $121,733 and a floor near $51,128.
At the time of writing, Bitcoin is trading at around $67,000, well above the floor but well below the trend.
Floors are not static. This model is fixed at the time since Bitcoin’s genesis block on January 3, 2009, increasing to the roughly 5.8 power, so the lower bound is about 0.093% per day, or about $47 per day at current levels.
By October 1st, the lowest price is expected to be around $62,700. By October 31st, it will reach approximately $64,400. It will reach $68,000 by the end of the year.
This means that if Bitcoin remains flat around $67,000 through the fall, the downside will catch up with it by mid-December. A significant drop below mid-$60,000 in the fourth quarter turns into a “first break” story.
Model in easy-to-understand English
The Bitcoin power law family of charts fits an asset’s long-term price trajectory to a power-of-time curve. It is often visualized as a straight line on a log-log plot.
Newhedge frames this as a long-term logarithmic power law model, attributed to astrophysicist Giovanni Santostasi, which believes that over time, prices increase to approximately the 5.8th power.
Most versions are corridors rather than single track. The reversion to the center represents the “trend” or “fair value”, while the parallel upper and lower rails act as “resistance” and “support”.
Santostasi frames his power law theory as an attempt to explain Bitcoin as a scale-invariant growth system, and claims it is scientific and falsifiable.
That framework is important. If the model is falsifiable, there must be a pre-committed rule, such as a floor below the closing price every week for a specified number of weeks. Without this rule, any breaks would be ignored as noise.
Why is October important?
The October deadline stands for punctuality.
Since this model is time-based, the floor will rise every day, even if Bitcoin does nothing. This turns a sideways market into a countdown story. By late October, floors will be in the mid-$60,000 range.
If the price continues to fluctuate below that level, it will generate a neat headline: “Bitcoin Breaks the Power Law Lower Bound for the First Time.”
However, a floor break does not “invalidate Bitcoin.” Certain parameterizations such as sites, bands, and data sources are disabled.
This indicates a change in the regime relative to the historical fit and suggests slower growth than the long-run curve would suggest. And that would give the critics a pretty story. Although log-log regression appears to be stable within the sample, it is statistically fragile.
Amdax’s Tim Stolte has been a widespread critic on precisely these grounds, arguing that the power law fit to Bitcoin is a spurious correlation caused by sample window sensitivity.
A drawdown of 4% to 6% from current levels is enough to push it above or below the mid-$60,000 floor, but it’s not uncommon. That’s everyday volatility. Bitcoin’s one-month at-the-money implied volatility recently sat at around 51.77% as of February 10th.
Deribit’s DVOL Explainer provides rules of thumb for converting annual volatility into expected daily changes. So dividing by the square root of 365 is approximately 19. This translates into a mid-single-digit percentage range for expected daily fluctuations.
A sharp risk-off episode could easily push Bitcoin into the low $60,000 range or below.
Fidelity’s Julian Timmer has publicly framed around $65,000 as a “line in the sand” level, drawing on a power-law style trend framework. This makes the story feel less like code numerology and more like a broadly noted psychological level that happens to rhyme with the model’s rising floor.
When organizational voices refer to the same zone, the model’s bands become self-fulfilling coordination points.
Three scenarios for Q4
There are three possible scenarios for the fourth quarter.
The first is the “Chop is dangerous” frame. Even if Bitcoin stays flat, the bottom will continue to rise towards it. Weekly compaction will cause the cushion to shrink. If prices remain near current levels, the buffer will completely disappear by late October.
The second is the framework that “volatility enables breaks.” Given the current implied volatility, monthly swings in the mid-teens are normal. A drawdown of 4-6% is not an outlier.
If Bitcoin falls due to macro surprises or accelerating ETF outflows, the downside will be tested immediately.
The third is the “Mainstream Anchor” frame. The mid-$60,000 range continues to appear not only in power law charts but also in system explanations. This makes the zone an adjustment point.
A level becomes important through reflexivity if enough participants treat it as important.
This model ignores drivers, but drivers determine where Bitcoin is traded within a channel. Two variables are most important. ETF flow regime and bursts of risk-off volatility.
Bitcoin has recently been trading in an environment where there is debate over whether ETF demand will cool or reverse. US spot Bitcoin ETFs led the rally from late 2023 to early 2024, but flows have slowed.
If outflows accelerate or inflows stagnate, the marginal bid price will decrease.
Additionally, the recent sharp downturn is tied to broader risk sentiment, including stock market stress, unexpected inflation, and geopolitical shocks.
These are precisely the regimes that create “gap risk” compared to a smooth trendline. The power law model assumes continuous compounding. There are discontinuities in the real market.
what does a break mean
Floor breaking does not “invalidate Bitcoin”. It would override certain parameterizations, suggest regime change for historical conformity, or hand over a clean narrative to critics.
Although log-log regression appears to be stable within the sample, it is statistically weak. They are vulnerable to the risk of spurious correlation, sensitivity to sample windows, and overfitting.
But the debate is becoming scientific again.
A recent academic preprint from February 2026 agrees that the price of Bitcoin is approximately a time power law, but data from 2011 to February 2026 found a different slope, approximately 4.2.
The paper argues that “activity warp time”, which adjusts the time horizons of volatility and trading volume, improves fitness and out-of-sample performance. Even sympathetic studies show parameter instability.
The power law model is not wrong. This is a first-order approximation that evolves as the system matures.
| date | Power law floor (project) | BTC level to avoid floor break (≈floor) | Cushion when BTC = $67,000 (USD / %) | Heading risk tag |
|---|---|---|---|---|
| Currently (mid-February 2026) | $51,128 | $51,128 | +$15,872 / +31.1% | low |
| October 1, 2026 | $62,700 | $62,700 | +$4,300 / +6.9% | medium |
| October 31, 2026 | $64,400 | $64,400 | +$2,600 / +4.0% | expensive |
| Mid-December 2026 (Catch-up below flat BTC) | ~$67,000 | ~$67,000 | $0 / 0.0% | expensive |
| December 31, 2026 | $68,000 | $68,000 | –$1,000 / –1.5% | expensive |
what to see
Distance to floor is updated weekly and is the cleanest tracker. You need to predefine whether “break” means wick, daily closing price, or weekly closing price.
Volatility regime is important. When implied volume pops, the probability of a floor tag increases mechanically. Headlines in ETF flows and macro risk-off episodes provide a “why now” factor that pushes prices into a testing range.
Model discrepancies themselves are worth tracking. Different parameter settings result in different floors.
Some people use the Genesis block as a starting point. Others are fixed at the initial exchange price. Some are renovated every year. Some have fixed parameters.
Those choices make a meaningful difference. Breaks on one chart may not appear on another chart.
The October deadline is not a prophecy. This is a mechanical consequence of time-based regression. The floor is rising every day.
When Bitcoin goes sideways or sells off, the floor catches up. By late October, the cushion will be gone.
Whether that matters depends on whether you believe the model has predictive power or is simply a historical artifact of fitting a curve. In any case, there will be a clear test in the next eight months.
(Tag translation) Bitcoin
