Blockchain media reported that the Bitcoin rainbow chart shows that investors must “buy more!” Bitcoin. Over the past two weeks, the market sentiment has been bearish, and prices may fall further.
Bitcoin (BTC) is trading near the $60,000 support area again. The same $60,000 support area was retested as support after the price plummeted to $5,600 two months ago.
At that time, the market sentiment was worrying, and investors were also cautious. Now, similar sentiments are prevailing.
Although the short-term price trend shows bearishness, the price trend on higher time frames is strong bullish. In the past six months, Bitcoin has risen by nearly 55% from its low point of $385,000 at the end of January.
It has set a higher low of $5,650, becoming a key support level that buyers need to defend in the coming weeks.
The Bitcoin rainbow chart shows that it is still a good time to buy Bitcoin. The chart represents the price trend of Bitcoin on a logarithmic scale, which helps investors predict potential cycle tops.
The color chart highlights different areas from “Bitcoin is dead” to “maximum bubble area.” As of the time of writing, BTC is in the fairly aggressive “buy more!” marked area.
As of the time of writing, the chart believes that there is still a long way to go for the price discovery of this cycle.
AMBCrypto observed that the peak of the past two cycles occurred 17-18 months after the halving. Extrapolating this to the current cycle, the peak may be reached in September or October 2025.
In 2021, BTC failed to surpass the “Is this a bubble?” area. AMBCrypto has chosen a more conservative approach this time, and believes that Bitcoin may not cross the “HODL” area this time.
Even with this conservative bet, the value of Bitcoin is set at $260,000, and if Bitcoin enters the “Is this a bubble?” area, the estimated value is $373,000.
So, there you have it, mark something on your calendar – sell Bitcoin for over $250,000 in September 2025.
Of course, this is not an accurate prediction, based entirely on the Bitcoin rainbow chart and the fluctuations and peak times of the previous cycle.
Investors’ cautious approach and deeper research into price trends and on-chain indicators are necessary for a more sensitive assessment of the cycle peak.
Weakness of buyers highlighted
The Coinbase premium index has been negative for the past month. This means that the price of the Coinbase market is less than 0.1% lower than the Binance USDT Bitcoin pair.
This indicates that the interest of U.S. investors in Bitcoin has decreased significantly over the past six weeks. In March and April 2024, the index was basically positive, but since then, the sentiment has changed significantly.
Another sign of bearish market sentiment is the significant drop in open interest contracts. On June 6th, the OI was $19.1 billion. As of the time of writing, with a 14.6% drop in price, the OI is $16.5 billion.
It indicates that due to the continuous decline in recent weeks, futures market participants tend to remain on the sidelines and are unwilling to go long on BTC.
In the long run, this may be a good thing, as it eliminates over-leveraged long positions and guides prices towards a more stable, spot-driven direction.
AMBCrypto also pointed out that the data on Bitcoin ETF inflows from Farside Investors has been negative for the past week. This is in stark contrast to the first week of June, once again reflecting a change in sentiment.
Reading Bitcoin’s [BTC] price forecast for 2024-25
AMBCrypto emphasized in a recent report that the current price decline may further head south. There are many reasons for the cryptocurrency market sentiment to be in distress, including the news of Mt. Gox and the repayment of assets stolen from customers ten years ago.