Anticipating Bitcoin Bear Markets with the Power Law

Can the Power Law predict bitcoin bear markets? Not the day of the top or the low, but the order of magnitude. The floor twelve months after the top has shown the depth of every bear market since 2013 to within five percentage points, and the lows came 163 to 406 days after the top. That is enough to make a plan before the next crash begins.

Everyone is wiser afterwards

How past bear markets went, how deep and how long, is covered in Every Bitcoin Bear Market Compared. This article asks something else: what could you have known beforehand? And what can you decide today for the next bear market?

The answer comes from this site's Power Law and its three lines: at the bottom the floor, 0.42 times the power-law line; in the middle the trend as fair value; at the top the top band through the past cycle tops. All figures are recalculated from daily closes in US dollars, last close 7 November 2026.

The tops come ever closer to the trend

A cycle top is an all-time high that was not exceeded for at least a year. There have been five so far. Measured against the trend they were:

This is the most important number for any bear market. The higher it climbs, the further it falls: in 2011 the price at the top stood at 37 times the floor, in 2025 at less than three times. Because the lows since 2011 always ended near the floor, the distance from the top to the floor decides how much a bear market can cost.

The chart shows the price as a multiple of the trend, with floor and top band. The peaks get smaller from cycle to cycle, the troughs stay roughly as deep:

The drop: the floor in twelve months

Since 2013 a bear market took about a year from top to low. During that time the floor keeps rising. So the simplest forecast of the depth is: the price falls from the top to the floor as it stands twelve months later.

The actual decline is the lowest close before the next all-time high, for 2025 the lowest so far (30 June 2026). Since 2013 the drop was never more than five percentage points off. Only the first cycle in 2011, in a tiny market, fell much deeper.

With what was known at the time

The drop above uses the actual top price. You only know it afterwards. What would the top band have said, calculated only from the tops that came before?

In 2017, with only two earlier tops, the price shot 84 % above the line. In 2021 the top band was 7 % below the top, in 2025 22 % above it, and the drop was only two to four points off the actual decline. The more cycles the band knows, the better it hits. Five tops are still few.

When the low came and how close to the floor

Depth is one thing. For your plan it also matters when to expect the low and how long it takes afterwards.

The accumulation zone runs from the floor to the middle between floor and trend on the log chart. Three patterns:

1. The low came 5 to 14 months after the top, three times since 2013 after about a year.
2. It lay at the floor or up to a third above it. Twice the bear market ended just below it (2022, 2026), twice clearly above (2015, 2018).
3. The price was closer to the low than the time was. From the first day in the accumulation zone the price fell at most another 18 %, but it could still take five months.

The recovery afterwards is the least predictable part: 48 to 860 days back to the trend. So don't plan on the price coming back quickly after the low.

The plan: what you do at which line

These figures lead to a plan in two parts. You carry out the first when the price is high, the second when it falls. You decide both today, not when the time comes.

When the price nears the top band

1. Calculate the drop. Floor in twelve months ÷ today's price. That is the decline you have to sit through if today is the top. If it is not bearable for your holdings, you hold too much bitcoin.
2. Sell in small steps, not everything. You won't hit the top. When partial sales at the top band paid off so far and when they did not is worked out in The Bitcoin Top Band: When Partial Sales Make Sense.
3. Set aside the reserve for the bear market. What you sell or save during this time is the money you buy with at the floor 5 to 14 months later.
4. Reduce leverage and loans. With a drop of −50 %, any loan against bitcoin becomes a danger.

When the price falls towards the floor

1. Note the time window. Counting from the top, expect the low between month 5 and month 14. A low after six weeks is more likely a stopover.
2. Note the floor at the end of the window. It is the price at which past bear markets ended. It rises every day, so the target moves upwards.
3. Buy from the accumulation zone on, not only at the low. The price was then at most 18 % from the low. How to go about it with a savings plan and reserve, with recalculated rules, is in Buying Bitcoin in a Bear Market: Strategy Instead of Gut Feeling.
4. Expect days below the floor. In four of five cycles the price closed below it for a while. That is no reason to panic, rather the cheapest part of the cycle.

What this means today

On 7 November 2026 bitcoin closed at $75’868. The top of 6 October 2025 is 13 months ago, the low so far was $58’628 on 30 June 2026, after 267 days, 1.5 % below the floor of that day.

The price is in the accumulation zone, and the time window for the low (up to day 406, around mid-November 2026) has almost run out. By the formula the floor reaches today's price in early April 2027. If the price stays where it is until then, it will be on the floor. What happens after the low and whether the four-year rhythm still holds is examined in The Bitcoin Four-Year Cycle: Myth or Pattern?.

What the Power Law does not anticipate

• The timing of the top. A cycle top only counts as one once it has stood for a year. At the moment of the top you don't know it. That is why the plan calculates the drop from any price at the top band, not from the one top.
• Lows well above or below the floor. In 2015 and 2018 the bear market ended 26 and 34 % above the floor. Anyone who wanted to buy only at the floor got nothing in 2018. In August 2015, on the other hand, the price fell to 0.88 times the floor.
• A break of the model. Five cycles are few, and the top band rests on five points. A crash well below the floor cannot be ruled out. How deep the floor has held so far is in The Power Law Floor: How Low Can Bitcoin Fall?, the fundamental objections in Criticism of the Bitcoin Power Law.
• The length of the recovery. 48 or 860 days back to the trend: that range is too wide for a plan. Count on the long one.