Bitcoin · power law · the sideways test
The power-law floor rises every day. So the price doesn't have to crash to fall below it. If Bitcoin just trades flat for long enough, the rising floor climbs up and overtakes it. This shows how long that would take at any price, and whether a breach would actually break the model.
01 / THE COUNTDOWN
02 / THE VERDICT
Short answer: a brief breach, no. A sustained one, yes. The floor isn't a hard wall. It's the lower edge of a statistical band. Here's how to think about it honestly.
The floor is the model's −2σ band (about 0.4× fair value). By construction, a normally-distributed price sits below a −2σ line roughly 2–3% of the time, so the occasional, brief excursion below the floor is expected, not a refutation. Real weekly data shows three such excursions in fifteen years, a shallow ~10-week dip in Aug-Oct 2015, a one-week touch in Jul 2016, and the March 2020 crash, well under the 2-3% a normal distribution would predict, and the model carried on fine each time.
What would genuinely invalidate the power law is a structural break: the price spending an extended period well below the floor, the log-log fit's R² degrading, and the best-fit slope having to drop materially on each refit. That's the difference between noise around a line and the line no longer being there. One dip is noise. A new, lower regime is invalidation.
A sideways breach is gentle: the floor rises into a flat price rather than the price falling into the floor. But the meaning is sharp. It would say Bitcoin has stopped growing while the model still expects continued (if decelerating) growth. The longer a flat price persists past the breach date below, the more it stops looking like a routine visit to the floor and starts looking like the model breaking.
The power law is a descriptive model, not a law of nature, and "invalidation" isn't a single moment. It's the accumulation of evidence that the relationship no longer holds. This page is an illustration of the model's own logic, not a forecast, and nothing here is investment advice.