One number can explain Bitcoin's price:
That number is -0.65.
This is Bitcoin's Z-score.
In simple terms if you're not a statistician:
The Z-score tells you how much the price deviates from its normal range.
• Z = 0 → Price is normal
• Z > 0 → Price is too high
• Z < 0 → Price is too low
It doesn't predict speculation, but rather measures the tension in the price.
Here's the significance of -0.65:
At this point after each previous halving, Bitcoin's price was above the trend level:
2012: +1.02
2016: +1.32
2020: +0.48
Today: -0.65
This has never happened before.
Never in the last 15 years.
So what does the data tell us next?
I ran the full dataset: 5,681 daily observations.
Every crash. Every bubble. Every macroeconomic system.
The relationship between the Z-score and future prices is not weak.
Correlation with future 18-month returns: -0.745
Variance explained by this single variable: approximately 56%
This means that the degree of price overexpansion explains subsequent movements better than interest rates, CPI, market narratives, or sentiment.
From Z ≤ -0.6 (where we are now):
• 12-month win rate: 100%
• Negative returns: 0
• Worst case: +47%
• Median return: +181%
From Z ≥ +1.0:
• Win rate: 44%
• Maximum drawdown: -73%
This is not a subjective opinion.
This is asymmetry.
So why doesn't the price "feel" bullish? Because Bitcoin pricing is no longer like trading.
It's being used.
Bitcoin is now traded 24/7, settled instantly, and can be used as collateral. Funds can flow through Bitcoin without anyone pressing a buy button on an exchange.
This temporarily suppresses prices.
But it doesn't weaken demand.
The market calls this "lack of interest."
Mathematically, it's called a classification error.
Meanwhile, supply has mathematically tightened permanently.
The 2024 issuance halving.
ETFs absorb hundreds of Bitcoins daily off-exchange.
Institutions are quietly accumulating.
Selling does occur, but Bitcoin is transferring from short-term holders to long-term holders' balance sheets at approximately a 36% discount to its network value.
This is not distribution.
This is a change of ownership.
Mean reversion doesn't need a catalyst.
Discrepancy half-life: Approximately 133 days.
This means:
• Approximately 50% of the gaps will be closed within about 4 months.
• Approximately 75% of the gaps will be closed within about 8 months.
• Approximately 90% of the gaps will be closed within about 12 months.
No need for optimism.
No explanation needed.
Time will tell.
This is not a trade.
This is a position.
It's not a bet on a "Bitcoin surge."
It's a bet that mathematics still holds true in this cycle.
Because when a highly stretched system recovers quickly...
