Bitcoin (BTC) has regained the $21,000 level in November after weeks of consolidating around $20,000, characterized by sideways price movement. Notably, investors are exploring potential signals for the asset’s price bottom that would likely usher in a new rally.
Indeed, Bitcoincenter’s rainbow price chart is among the tools used to gauge Bitcoin’s performance by highlighting the asset’s past trends alongside insights into long-term price movement. The tool is also known as the fun chart indicating the market sentiments in colored bands.
The chart’s prediction indicates that Bitcoin will likely regain a critical support level by the end of 2022, suggesting that the flagship cryptocurrency could potentially reclaim the $25,000 level, which lies in the ‘Basically a Fire Sale’ band. Notably, Bitcoin’s current price is also operating in the zone.
Furthermore, the rainbow chart trends indicate Bitcoin might have bottomed. For instance, when Bitcoin traded in the ‘Basically a Fire Sale’ zone in March 2020, the asset embarked on a historic rally that resulted in a record high of $69,000 in late 2021. Bitcoin’s latest consolidation has been marked by dropping volatility with the price stabilizing.
Impact of Bitcoin possible price bottom
Additionally, with Bitcoin trading in the $20,000 range, a section of the market believes the asset could have found the floor. If the bottom is confirmed, investors will be able to maximize their capital efficiency to gain the maximum possible upside with the least downside risk.
At the same time, using the Bitcoin rainbow chart calls for caution since the bands are adjusted over time to better fit past performances. Elsewhere, the color bands follow logarithmic regression and are not part of the scientific basis.
It is worth noting that the crypto community is expressing bearishness for Bitcoin by the end of the year. In particular, the CoinMarketCap crypto community predicts that Bitcoin will trade at an average price of $21,237 by the end of December 2022, according to data obtained by Finbold on November 5.
The price represents a drop of less than 1% from Bitcoin’s value at the time of publishing. The projection is based on votes by 12,953 community members leveraging the price estimate tool.
Bitcoin technical analysis
Interestingly, long-term Bitcoin technical analysis expresses mixed sentiments for the asset. For instance, a summary of one month of technicals highlights neutrality at seven with ‘buy’ at 10. Moving averages are for sale at nine, while oscillators are for ‘buy’ at four.
In this case, the $25,000 level is considered a critical psychological point for Bitcoin as it places the asset in line to regain the highs witnessed towards the end of last year. In the meantime, Bitcoin was trading at $21,250 by press time after several attempts to breach the level.
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Source: https://finbold.com/bitcoin-price-prediction-for-december-31-2022/