Bitcoin Price Cycles Under Scrutiny: Power Law Points to Critical Support Levels

Power Law Identifies Critical Support Zones

The debate over Bitcoin price cycles has gained fresh momentum. Jurrien Timmer, Director of Global Macro at Fidelity Investments, has identified the $65,000 mark as a decisive price point for Bitcoin in a recent analysis ^[2]. According to the analyst, BTC/USD could be facing a retest of a lower support line, currently running at $45,000 ^[2].

Timmer explained that Bitcoin is currently following the so-called Internet S-curve more closely than the Power Law curve ^[2]. The Power Law model attempts to determine a "fair value" for the Bitcoin price, with historical data showing that approaches to the support line have frequently coincided with long-term bottoms ^[2]. "For the moment, the critical line for Bitcoin is at $65,000 (previous high), and below that at $45,000. The latter is the Power Law trendline," Timmer stated ^[2].

Four-Year Cycles Remain Relevant – With Limitations

The question of whether Bitcoin continues to follow four-year price cycles is being debated controversially. For Timmer, halving cycles have a diminishing influence on price over time, although bear markets will continue to occur ^[2]. David Eng agreed with this assessment, arguing that bear markets will remain a characteristic feature of Bitcoin as a maturing asset ^[2].

"The notion that Bitcoin has 'ascended' into an S-curve price regime without bear markets misunderstands how prices form," Eng explained ^[2]. Bitcoin is a scarce asset within the financial system, not a standalone S-curve like the Internet ^[2]. Eng added that Bitcoin now faces longer price cycles and overall lower volatility ^[2].

Compression Demands Upward Movement

The current situation is being interpreted by some analysts as a "compressed" Power Law phase. Eng predicts that this compression requires an upward correction ^[2]. "Bitcoin isn't stagnating – it's contracting below its long-term growth law, and history shows this resolves through upward price adjustment, not through the law yielding," he shared with his followers on X ^[2].

In Eng's view, Bitcoin still follows a single Power Law with exceptional stability over more than 15 years ^[2]. Bubbles and crashes are fluctuations, not fundamental regime changes ^[2].

Global Ownership Dynamics in Transition

Parallel to the price discussion, global Bitcoin ownership dynamics are shifting. While retail investors hesitate in the face of uncertainty, institutional players are consistently building their positions ^[3]. MicroStrategy continues to increase its holdings, spot ETFs are gaining importance, and initial sovereign wealth funds are venturing into the cryptocurrency ^[3].

The majority of all Bitcoin remains in the hands of retail investors – approximately 13.66 million BTC distributed among an estimated 80 to 130 million people worldwide ^[3]. Publicly traded companies now hold over one million BTC, representing about six percent of total Bitcoin holdings ^[3]. At the top is MicroStrategy with 673,783 BTC ^[3].

State actors control approximately 432,000 BTC, representing around 2.1 percent of total supply, although these figures are considered controversial ^[3]. Among US Bitcoin ETFs, BlackRock's iShares Bitcoin Trust dominates with approximately 779,000 BTC ^[3].

Speculative Predictions for 2026

Samson Mow, founder of Bitcoin company Jan3, has published several far-reaching predictions for 2026 ^[1]. In an X post, he stated that Elon Musk will "go hard on Bitcoin" in 2026, without providing temporal or financial details ^[1]. Concrete evidence of a planned strategic shift by Musk or Tesla regarding Bitcoin is not currently available ^[1].

Additionally, Mow expects a Bitcoin price of around $1.33 million, justified by increasing state adoption and a structurally limited supply side ^[1]. When asked about previous predictions, Mow responded cautiously, explaining that one should not dwell on the past ^[1].