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‘Bitcoin Rainbow’ chart suggests BTC is now officially in a bull run; But is it?

‘Bitcoin Rainbow’ chart suggests BTC is now officially in a bull run; But is it?
Paul L.

After surging past $22,000, Bitcoin (BTC) is looking to reclaim new levels and sustain the current bull run. Although Bitcoin has largely traded in the green zone since the start of the year, it remains to be seen if the maiden crypto can extend its gains or if the bull run will be invalidated.

The uncertainty around Bitcoin stems from the fact that the crypto sector has yet to fully recover from the prevailing factors that dominated last year’s bear market. However, Bitcoincenter’s rainbow price chart suggests that Bitcoin’s current bull run may be just beginning, and investors could see the price of BTC continue to rise in the coming months. 

As of January 25, the Bitcoin rainbow chart indicates that BTC is in the ‘Buy’ zone after previously consolidating in the ‘Basically a Fire Sale’ area. Notably, the trajectory mirrors a historical trend last observed in March 2020 amid the onset of the pandemic.

Bitcoin Rainbow chart. Source: BlockchainCenter

Notably, investors use the tool to monitor the possible Bitcoin price movement in the future. The indicator deploys color bands that follow a logarithmic regression and reviews historical Bitcoin price performance to provide a potential insight into its long-term movements.

Bitcoin was trading below $6,000 when it exited the ‘Basically a Fire Sale’ in March 2020. The exit triggered a Bitcoin price bottom that pushed the asset to rally toward the 2021 bull run, culminating in BTC hitting an all-time high of almost $69,000.

Bitcoin bearish indicators

Even as the rainbow indicator points to a bullish Bitcoin future, a previous report indicated that the largest crypto by market capitalization’s ongoing rally could face a correction. Specifically, Bitcoin technical analysis suggests the asset could face a potential first-ever death cross scenario that spells bearish fortunes for the crypto.

At the same time, as reported by Finbold, a panel of fintech and crypto specialists maintains that Bitcoin’s value is poised to increase in 2023. The 56 specialists projected that Bitcoin might peak at around $29,095 in 2023 and finish the year at $26,844.

Bitcoin price analysis

Elsewhere, Bitcoin is still attempting to reclaim the $23,000 as the position continues to act as a key resistance level. The asset is currently changing hands at $22,706 with weekly gains of almost 7%.

Bitcoin seven-day price chart. Source: Finbold

In the meantime, Bitcoin is controlling a market cap of $437.78 billion with an overall crypto industry dominance of 42.5%.

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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