An analyst has explained how the next Bitcoin top could be situated around $400,000, if this model for the asset\u2019s price continues to hold.<\/p>\n
In a new post<\/a> on X, analyst Ali Martinez has talked about what the Long-Term Power Law could say about the next potential Bitcoin top. The \u201cLong-Term Power Law\u201d here refers to a BTC price model created by Bitbo<\/a>.<\/p>\n The model involves three lines, the main one\u00a0being the \u201cpower law,<\/a>\u201d which is derived by taking a linear regression of the historical BTC price. \u201cThis power law is just a straight line to represent the correlation between Bitcoin\u2019s price and time,\u201d notes Bitbo in the model\u2019s description.<\/p>\n The other two lines of the model are just replicas of the power law, with the only difference being how they are arranged on the chart. One of these lines is placed under the power law just enough that BTC\u2019s historical price either stays above it or touches it.<\/p>\n This level of the model is called the support line. Similarly, the other line sets an upper boundary on the cryptocurrency\u2019s price and is known as the resistance level.<\/p>\n Now, here is a chart that shows the trend in the Bitcoin Long-Term Power Law over the history of the asset:<\/p>\n As is visible in the graph, Bitcoin\u2019s spot price is currently being traded under the power law. The asset retested the line earlier in the year when it set its new all-time high (ATH)<\/a> but couldn\u2019t find a break. Despite the recent bearish action, though, BTC still has some distance over the support line of the model.<\/p>\n The graph shows that Bitcoin set three of its major tops around the resistance line.\u00a0However, the\u00a02021 bull run<\/a> top occurred before the asset could reach the level. Thus, it\u2019s unknown whether or not the current BTC cycle will follow the lead of the earlier three.<\/p>\n \u201cIf the Bitcoin Long-Term Power Law holds, the next market top might hit around $400,000!\u201d notes Martinez, based on the fact that the resistance level would assume a value around that mark next year.<\/p>\n