Bitcoin Buy Signal Points to 220% Upside Despite Near-Term Risk

Bitcoin (BTC) is trading below $69,000 on Tuesday, confirming the view that price consolidation is the most likely course over the short term. The sell-off to $60,000 and the subsequent recovery to $72,000 resulted in many BTC price indicators falling into what analysts believe to be a deep value zone, but will buyers reach the same conclusion?

Key takeaways:

• Bitcoin’s realized price bands have aligned with a long-term accumulation zone that preceded new BTC highs. 

• Power Law quantile models place BTC near the lower 15% of its long-term log-log price corridor, a zone that has consistently appeared after prior cycle peaks.

• Valuation and momentum metrics are clustering around the $40,000–$55,000 region, marking a statistically significant structural support area.

BTC realized price bands outline long-term DCA zones

Bitcoin’s realized price and shifted realized price have successfully identified long-term accumulation zones since 2015.

Realized price reflects the average cost basis of all BTC last moved onchain whereas the shifted realized price smoothens this metric forward in time, capturing deeper-value zones during stronger drawdowns.

Currently, Bitcoin’s realized price sits near $55,000, while the shifted realized price is around $42,000.

Multiple years of historical data show that rallies following the re-test of these zones delivered big gains, as shown in the chart above. While returns have diminished over time, the structure still implies upside potential of 170% to 220%, aligning with targets above $150,000 in the next bullish period.

Bitcoin has typically consolidated for six to eight months after testing the realized price bands before resuming an upward trend and hitting new highs.

Power law model signals relative undervaluation for BTC

Popularized by BTC researcher Giovanni Santostasi, the updated power law quantile model places BTC near the 14th percentile of its long-term log-log price corridor, suggesting temporary undervaluation following a cycle peak that fell short of the model’s projected $210,000 high in 2025.

Confluence between price trading near realized price bands and lower power law percentiles has preceded major recoveries.

The model’s fifth (0.05) percentile previously marked long-term cycle floors and now sits between $50,000 and $62,000, overlapping with the accumulation range defined by the realized price bands.

Related: Bitcoin holders sell 245K BTC in tight macro conditions: Did the market bottom?

Analysts say Bitcoin may sell off before the next big rally occurs

Bitcoin investor Jelle noted that BTC price is currently down roughly 31% from its first weekly RSI 37 break, a level that has preceded cycle bottoms since 2014.

The drawdowns ranged between 17% and 55%, with the recent cycles bottoming closer to 40–43%, implying potential downside toward $52,000 before a durable low forms.

Crypto analyst Sherlock highlighted a breakdown in the BTC/Gold (XAU) ratio below the 15–16 level, a signal that previously marked transitions into a bearish period.

Based on this framework, Sherlock warns BTC may still see a deeper retracement toward the $38,000 to $40,000 region if history repeats.

Related: Bitcoin price punishes traders as 24-hour crypto liquidations pass $250M