Bitcoin (BTC) has experienced a period of uncertainty over the past month. After reaching an all-time high (ATH) of over $73,000 in March, the leading cryptocurrency faced a strong downtrend in June and early July. This decline is believed to be influenced by various factors, including the German government’s plans to sell seized BTC and the long-awaited repayments from the collapsed crypto exchange Mt. Gox. The fact that Bitcoin has broken through multiple support levels has made many investors cautious.
Although BTC is still up by 32.44% in the year-to-date (YTD) chart, it has fallen nearly 20% in the last 30 days of trading and is currently 23.09% below its yearly and all-time highs.
As of July 8, Bitcoin has stabilized within the range of just below $54,500 to just above $56,000, levels not seen since February. The next move for Bitcoin remains uncertain, with little indication of whether it will rise or fall. The current price of Bitcoin is $56,147.
In this uncertain market, the Bitcoin Rainbow Chart provides valuable insights into the sentiment of investors and what the future holds for the cryptocurrency.
The Bitcoin Rainbow Chart is divided into nine color-coded zones, each representing a specific price range and associated market sentiment. These zones range from “Bitcoin is dead” to “Maximum Bubble Territory.” The recent downtrend has brought Bitcoin to the border between the “Accumulate” and “Still cheap” zones, indicating that it may be a good time to buy more coins.
The Rainbow Chart not only presents Bitcoin’s historical performance but also offers predictions for its future prices. According to the chart, if Bitcoin falls below $37,417.75 by the end of December, it suggests that the current bull cycle is likely over and the crypto winter is approaching. Conversely, trading above $186,667.72 would indicate a bubble, while sustained closes above $244,473.74 would almost guarantee a major correction.
The Rainbow Chart also suggests that Bitcoin would be most stable at the end of 2024 if it remains between $85,730.33 and $112,983.27, known as the “HODL” range. Investors should also keep an eye on the range between $112,983.27 and $144,774.1, referred to as the “Is this a bubble?” range.
Finally, the chart indicates that buying Bitcoin near the end of 2024 in the range of $50,768.84 to $65,962.8 would be a wise decision, as it is marked as the “Accumulate” area. Prices up to $85,730.33 would still be considered relatively cheap.
Disclaimer: The information provided in this article should not be considered as investment advice. Investing in cryptocurrencies carries risks, and capital is at risk.
