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Bitcoin prices recently fell below $71,000, erasing gains since the U.S. presidential election in late 2024.
However, analysts believe the current price represents a significant discount compared to long-term historical trends.
These analysts include analyst David, who conducted an analysis based on the power law index and estimated that the fair value of Bitcoin price is approximately $122,762, while Bitcoin is trading at $69,000.
By his estimate, this reflects a gap of about $52,000, or about 41%, which he described as below the historical normal range compared to trend.
In his explanation, David focuses more on market dynamics than general economic headlines, considering that recent price action has been dominated by forced flows in derivatives markets such as hedging and liquidation operations, rather than selling by long-term Bitcoin holders.
At the time of preparation and writing of this article, Bitcoin price is approaching $70,000, down approximately 9% in 24 hours and approximately 21% in a week, according to “CoinGecko” data.
On a monthly basis, the currency is down about 25% and is about 44% below its peak level set in October last year.
This drop resulted in a massive wave of liquidations, with CoinGlass data showing that more than 154,000 traders were liquidated within 24 hours, with total losses approaching $718 million.
Strategy firm was also affected by the recent decline after purchasing 855 Bitcoins for $75.3 million. Its paper losses have widened over the past four months, reaching about $40 billion, according to the Kobeissi Letter.
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