Despite Declining Prices, Bitcoin Is Increasingly Interested In The Power Law Corridor Model

Bitcoin is increasingly in demand with the 'Power Law Corridor' (Photo; Doc. DailyMail) model

JAKARTA - Bitcoin is again in the spotlight thanks to the Power Law Corridor model. Although the price fluctuates more than 13% of its peak in March, this model is increasingly popular with analysts and investors. Unlike the stock-to-flow (S2F) price model, which previously dominated the conversation, the Power Law Corridor model now has its own place in discussions about bitcoin (BTC) price predictions.

The stock-to-flow (S2F) model popularized by Plan B has become a hot topic of conversation. However, recently, attention has turned to the Power Law Corridor model which is considered more relevant. The theory of Power Law and bitcoin is now widely discussed on various forums and social media platforms. John Osterman, a well-known analyst, reviewed the lines of support allegedly related to this Power Law model.

Quoted from Bitcoin.com News, Osterman said, Model Power Law bitcoin has no concept of determining market time. This is just the bottom floor. No one needs to worry because the floorline/support continues to rise. If you believe that the price of bitcoin will not fall below the red support line, congratulations, you are a follower of the bitcoin Power Law model.

Power Law or Power Law Corridor's theory states that certain financial phenomena, such as bitcoin price dynamics, follow a mathematical link where major events (such as significant price changes) are rarer but have a greater impact than smaller, more common events.

In this context, asset prices generally follow corridors that are in accordance with the Power Law distribution. The probability of extreme price changes is reduced, but it is still possible as the value moves away from the average. The price movement of BTC is parallel to the Logarithmic Growth Curve, usually remaining within the predetermined curved limits.

In the first week of March 2024, Bitcoin.com News highlighted the formula proposed by bitcoin fans Fred Krueger and Giovanni Santostasi. Using the Power Law equation, they predict BTC could soar to 1 million US Dollars (approximately IDR 16 billion) per coin by 2033. Although BTC peaked dramatically at 73,794 US Dollars (approximately IDR 1.2 billion) on March 14, 2024, discussions on Power Law theory continued.

The X Plan C account states, Bitcoin's Power Law support has been strong for the past 15 years. It has gone through the 2020 crisis, Luna's collapse, the FTX scandal, and others. If this support persists, this will be the lowest price we can expect. Power Law support = 0.03 Kuantil Regression.