There has been no small amount of uncertainty surrounding Bitcoin (BTC) for approximately a month. After a significant climb in the initial months of 2024 and a new all-time high (ATH) near $73,000 in March, the world’s premier cryptocurrency found itself in a strong downtrend in June and early July.
While the decline is widely considered to be at least partially driven by a convergence of events – including the German government’s plans to offload seized BTC and the long-awaited repayments by the collapsed crypto exchange Mt. Gox – the fact that Bitcoin has crashed through multiple support zones has left many investors wary.
Though BTC remains 32.44% in the green in the year-to-date (YTD) chart, it has fallen nearly 20% in the last 30 days of trading and is 23.09% below its yearly – and all-time – highs.
By July 8, the cryptocurrency appears to have settled in the range between just below $54,500 and just above $56,000 – levels not seen since February – with little certainty about whether the next move will take it higher or lower. Bitcoin price today, at press time, stands at $56,147.
BTC YTD price chart. Source: FInbold
In this climate of fear and uncertainty, the Bitcoin Rainbow Chart – a tool that utilizes a logarithmic growth curve and describes investor sentiment at various price levels – can offer valuable insights into what the coin’s next move in the crypto market may be.
The 2024 Bitcoin Rainbow chart
The Bitcoin Rainbow Chart is divided into nine color-coded zones, each representing a certain price range and the associated market sentiment. These range from ‘Bitcoin is dead’ – lows that indicate that severe bearish sentiment prevails – to ‘Maximum Bubble Territory’ – highs that are so high that the cryptocurrency’s price is likely to plummet.
According to the chart, the recent downtrend brought Bitcoin to the border between ‘Accumulate’ – levels that indicate it is a good time to purchase more of the coin – and ‘Still cheap’ – another zone predicted to be well below BTC’s forthcoming highs.
Bitcoin Rainbow chart. Source: BlockhainCenter
Bitcoin Rainbow chart predicts Bitcoin ranges for end of 2024
In addition to presenting Bitcoin’s historical performance and placing it in a market sentiment context, the Rainbow Chart also offers some insights into the likely future prices of the world’s premier cryptocurrency.
According to the tool, should BTC find itself below $37,417.75 in late December, it would mean that the current bull cycle is likely at an end and that the winds of the crypto winter are again blowing strong.
On the other hand, trading above $186,667.72 would hint that Bitcoin has become a bubble, while sustained closes above $244,473.74 would all but guarantee it, meaning that a major correction is almost certainly imminent.
Bitcoin Rainbow chart zones for late 2024. Source: BlockhainCenter
Eslewhere, the Rainbow chart indicates that BTC would be the most stable at the end of 2024 if it remains between $85,730.33 and $112,983.27 – the ‘HODL’ range – and relatively stable, though investors would do well to keep a lookout for the range between $112,983.27 and $144,774.1 – the ‘Is this a bubble?’ range.
Finally, the tool strongly suggests that an investor would be right to buy Bitcoin near the end of 2024 if it trades in the zone between $50,768.84 and $65,962.8 as it marks the area as ‘Accumulate’ though prices up to $85,730.33 would still be considered relatively cheap.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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