Bitcoin’s long-term “fair value” can be modeled using a power law trend over time. Price moves above and below this trend, but historically, deviations tend to slowly return back toward it.
Mathematically, this behavior can be described using an Ornstein–Uhlenbeck (OU) mean-reverting process — similar to a damped spring.
🔎 Key Idea:
When $BTC moves far away from its long-term trend (positive or negative deviation), there is a statistical tendency to revert back over time.
📉 Mean Reversion Speed:
• ~50% of deviation closes in about 4–5 months
• ~75% in ~9 months
• ~90% in ~14–15 months
This suggests Bitcoin behaves like a noisy but slow mean-reverting system around its long-term growth curve.
📌 Practical Meaning:
The larger the deviation (z-score), the stronger the expected pull back toward trend value over the next 6–18 months.
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