Bitcoin has fallen to the lowest band of the rainbow model, trading 66% below its long-term trend price of $186,700. The volatility-adjusted Z-Score has dropped to -2.293, below the 2022 low of -1.979, indicating a greater chance of discount across cycles. The current cycle has reached day 1,363, approaching previous bottoming windows around days 1,432 and 1,436. Bitcoin has declined 49–50% from its October peak of $126,000, with MVRV remaining near 1.2. A widening divergence has emerged as global M2 liquidity continues rising toward 144,946 while Bitcoin declined toward $62,795.
Bitcoin’s current valuation sits at the lowest end of the rainbow model, extending a decline that has moved the price below its historical trend. At press time, BTC traded 66% below the $186,700 model price, placing it beneath the lowest “fire sale” band.
Supporting this deviation, the volatility-adjusted Z-Score has fallen to -2.293, below the 2022 low of -1.979. This indicates there is a greater chance of discount when considering differences in volatility across cycles.
Historically, similar extremes have aligned with accumulation periods, though they do not technically identify the final bottom. A recovery above the lowest band would indicate Bitcoin is beginning to close its valuation gap.
The current cycle has reached day 1,363, while the previous two recorded bottoms around days 1,432 and 1,436. This places BTC at roughly 69–73 days from matching those cycle lengths even though valuation conditions remain different.
Bitcoin has declined 49–50% from its $126,000 October peak, while MVRV remains near 1.2. That reading stays above the 1.0 level associated with deeper valuation resets, implying valuations have not fallen as deeply as during some previous major bottoms.
Through 2024 and 2025, Bitcoin and global M2 largely moved higher together before separating sharply in 2026. Global M2 continued rising toward 144,946, while BTC declined toward $62,795, creating a widening divergence.
The 24-month correlation has dropped into negative territory, even though the long-term correlation remains at 0.86. The increase in liquidity provides little directional support for Bitcoin compared to historical trends.
