Bitcoin’s recent correction continues to shake market confidence, with the leading cryptocurrency enduring intense selling pressure in recent weeks. Since May 15, Bitcoin has steadily fallen 26.8%, with the price now trading near the bottom of the cycle at $60,000. Despite continued market weakness, it appears the latest decline has pushed Bitcoin into one of its most attractive accumulation zones in years.
The power law model allows for a rare undervaluation of Bitcoin
In a recent one after 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 entered an extreme undervaluation zone, based on the widely followed Bitcoin Power Law model. For context, the Power Law model is a long-term valuation framework that tracks Bitcoin’s growth trajectory. Rather than focusing on short-term price movements, the model attempts to measure whether Bitcoin is trading above or below its historical trendline.
Bitcoin just dropped to an extreme regression level based on the Power Law model.
By falling below the 4% quantile, Bitcoin has entered a 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, i.e. 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 increased investor uncertainty.
Historical trends indicate accumulation opportunities
According to Darkfost, periods of extreme undervaluation represent phases where investors should gradually increase rather than reduce their exposure. This observation is rooted in historical market behavior, where Bitcoin has tended to recover after reaching these undervaluation levels, as seen in 2016, 2020, and 2022. However, it is worth noting that the 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 rather than short-term price direction. As a result, investors are encouraged to look at it from a broader investment horizon and deploy their positions carefully. At the time of writing, Bitcoin is valued at $61,592, after a slight gain of 1.95% in the past 24 hours. Meanwhile, daily trading volume fell 56.14% to $31.21 billion. According to Coincodex Analysts rank the Fear & Greed Index at 12, indicating a market carnage with extreme fear and dominant bearish sentiment. However, Coincodex analysts predict that the market will recover quickly, with a projection of $69,489 next month.