Bitcoin
Bitcoin Rainbow Chart says NOW is the time to buy BTC – isn’t it?
- The Bitcoin Rainbow chart entered the “buy” zone after the 2020 and 2024 halvings.
- Market indicators suggested a drop in prices in the coming days.
Investor confidence in Bitcoin [BTC] has declined somewhat as the crypto king does not surpass $69K. However, the Bitcoin Rainbow Chart revealed that BTC was actually mimicking its 2020 trend following the halving.
Does this mean BTC is ready to start a rally?
The right time to buy Bitcoin?
Bitcoin price volatility has decreased in recent days. This caused problems for BTC, which was struggling to surpass $69,000.
However, investors should not be discouraged as BTC was mimicking its post-halving behavior in 2020.
AMBCrypto analysis revealed that months after its third halving, the Bitcoin Rainbow chart revealed that the coin entered the “BUY” zone. After remaining in this zone for a few months, the price of BTC soared.
A similar trend was observed on BTC’s 2024 Rainbow chart as it indicated that the coin was in the buy zone.
If this is considered, then this might just be the last opportunity for investors to buy BTC at a lower price before it rises and enters the accumulation and HODL zones.
Source: BLOCKCHAINCENTER
AMBCrypto then analyzed BTC’s on-chain metrics to see if investors considered buying BTC as suggested by the Rainbow chart.
We found that Exchange outflow fell last week after spiking on May 24th. Its supply on the exchanges increased, which means that investors chose to sell.
Source: Santíment
Our view of CryptoQuant data revealed that BTC net deposits on exchanges were high compared to the average of the last seven days, further suggesting high selling pressure.
Additionally, Coinbase Premium was red, meaning selling sentiment was dominant among North American investors.
Bitcoin’s problems are far from over
AMBCrypto then checked whether increased selling pressure could result in a price correction.
We discovered that investors were not following the Bitcoin Rainbow chart as its aSORP was red, suggesting that more investors are selling at a profit. In the middle of a bull market, it could indicate a market top.
To date, BTC fear and greed index it had a value of 74, which means that the market was in a “greed” phase. Whenever the metric reaches this level, it indicates a price correction.
Source: CryptoQuant
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Just like the metrics, most technical indicators also looked bearish. For example, the MACD displayed the possibility of a bearish crossover.
The Relative Strength Index (RSI) registered a decline, indicating a price drop soon. However, the Chaikin Money Flow (CMF) remained bullish as it moved north.
Source: TradingView