Bitcoin Logarithmic Volatility Decay Indicator

The top of the chart shows the BTC price line; the bottom indicator represents the MVRV of on-chain investors holding BTC for 2-5 years. Bear market bottoms in '15, '18, '22, and the projected 6w in '26 correspond to indicator values of 24.9, 4.9, 2.4, and 1.8, respectively. Notice how the indicator exhibits an extremely consistent logarithmic volatility decay. Each bear market bottom sees the indicator drop by approximately the square root of the previous cycle. This nonlinear convergence suggests the market is entering a stable bottoming phase. It’s also reasonable to expect that the next bear market bottom will see this indicator compress at the square root rate of the current cycle’s bottom.