- The Bitcoin Rainbow chart indicates that investors should consider buying BTC, but sell pressure remains high.
- Market indicators hint at a potential price decline in the coming days.
- Investors’ confidence in Bitcoin has somewhat dwindled as the cryptocurrency struggles to surpass $69k.
Discover why the Bitcoin Rainbow Chart suggests now might be the perfect time to buy BTC, despite current market pressures.
The Right Time to Buy Bitcoin?
Bitcoin’s price volatility has declined over the last few days, causing trouble for BTC as it struggles to surpass $69k. However, investors should not be disheartened. Bitcoin is mimicking its 2020 post-halving behavior. AMBCrypto’s analysis revealed that after months of its third halving, the Bitcoin Rainbow chart indicated that the coin entered the “BUY” zone. After remaining in that zone for a few months, BTC’s price skyrocketed. A similar trend can be observed in BTC’s 2024 Rainbow chart, suggesting that the coin is currently in the buy zone. If this trend continues, it might be the last opportunity for investors to buy BTC at a lower price before it moves up and enters the accumulate and HODL zones.
Market Sentiment and On-Chain Metrics
AMBCrypto analyzed BTC’s on-chain metrics to determine whether investors are considering buying BTC as suggested by the Rainbow chart. The analysis found that Bitcoin’s Exchange Outflow dropped last week after spiking on the 24th of May. Additionally, its Supply on Exchanges increased, indicating that investors chose to sell rather than buy. CryptoQuant’s data revealed that BTC’s net deposit on exchanges was high compared to the last seven-day average, further hinting at high selling pressure. Moreover, its Coinbase Premium was red, meaning that selling sentiment was dominant among U.S. investors.
Bitcoin’s Troubles Are Far From Ending
AMBCrypto examined whether the rise in selling pressure could lead to a price correction. The analysis found 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, this can indicate a market top. At press time, BTC’s fear and greed index had a value of 74, indicating that the market was in a “greed” phase. Whenever this metric reaches such levels, it often signals a price correction.
Like metrics, most technical indicators also appeared bearish. For instance, the MACD displayed the possibility of a bearish crossover. The Relative Strength Index (RSI) registered a decline, indicating a potential price drop soon. Nonetheless, the Chaikin Money Flow (CMF) remained bullish as it moved northwards.
Conclusion
In conclusion, while the Bitcoin Rainbow chart suggests that now might be an opportune time to buy BTC, various market indicators and on-chain metrics point towards high selling pressure and potential price corrections. Investors should carefully consider these factors before making any investment decisions. The current market sentiment and technical indicators suggest a cautious approach, despite the optimistic signals from the Rainbow chart.
