Bitcoin is currently trading at a significant discount, with its price recently falling below $71,000, erasing gains since the late 2024 U.S. presidential election. Analyst David, using a power-law valuation model, estimates Bitcoin's fair value at $122,762, indicating a 41% discount from its current spot price of around $72,000. This gap is attributed to forced flows in derivatives markets rather than long-term holder activity. David highlights that Bitcoin's z-score, a measure of price deviation from the trend, is at minus 0.76, suggesting a significant undervaluation. Despite a 20% price drop over the past 30 days, open interest has increased by nearly 7%, indicating rising leveraged exposure. The analyst notes a 70% probability of a price squeeze if upward movement occurs, with $73,000 identified as a critical gamma level affecting volatility. Recent market conditions have led to substantial liquidations, with over 154,000 traders liquidated in 24 hours, resulting in losses of approximately $718 million. Strategy, a major Bitcoin holder, has seen its position suffer, with paper losses reaching $40 billion over the past four months.