Bitcoin’s recent correction continues to shake market confidence, with the top cryptocurrency enduring intense selling pressure over the past few weeks. Since May 15, Bitcoin has fallen steadily by 26.8%, and the price is now hovering around the bottom of the cycle at $60,000. Despite the market’s continued weakness, it appears that the latest decline may have pushed Bitcoin into one of its most attractive accumulation zones in years.
The power law model produces a rare undervaluation of Bitcoin
In a recent publish on X, popular market analyst Darkfost highlighted a significant development in Bitcoin’s long-term valuation metrics. According to the analyst, the digital asset has now fallen into the zone of extreme undervaluation based on the widely used Bitcoin Power Law model. In context, the Power Law model is a long-term valuation framework that tracks Bitcoin’s growth trajectory. Instead of focusing on short-term price movements, the model tries to measure whether Bitcoin is trading above or below its historical trend line.
Bitcoin has just fallen to an extreme regression level based on the Power Law model.
Falling below the 4% quantile, Bitcoin entered the zone of extreme undervaluation.
To put this into perspective, Bitcoin has spent less than 4% of its entire history trading on… pic.twitter.com/Mukd2wH0pD
— Darkfost (@Darkfost_Coc) June 6, 2026
Notably, Darkfost reports that Bitcoin has now fallen below the model’s 4% quantile, meaning the asset is trading at a valuation lower than approximately 96% of its historical observations relative to its long-term growth path. Historically, these periods below the 4% quantile level have been associated with deep market pessimism and heightened investor uncertainty.
Historical trends suggest an opportunity for accumulation
According to Darkfost, periods of extreme undervaluation represent phases when investors should gradually increase exposure, not decrease it. This observation is rooted in historical market behavior, where Bitcoin tends to recover after reaching these undervalued levels, as seen in 2016, 2020, and 2022. However, it is worth noting that a power law signal should not be interpreted as an indication of an immediate market reversal. Instead, the Power Law model is designed to assess long-term valuation conditions, not short-term price direction. As a result, investors are encouraged to view it through a broader investment horizon and allocate their positions carefully. At the time of writing, Bitcoin is valued at $61,592, after a slight increase of 1.95% in the last 24 hours. Meanwhile, daily trading volume fell 56.14% to $31.21 billion. According to Coincodex analysts, the Fear and Greed Index stands at 12, indicating market carnage with extreme fear and bearish sentiment dominating. However, Coincodex analysts predict that the market should recover soon, with a projection of $69,489 next month.
