Journalist
Posted:
- Bitcoin Rainbow Chart gave a buy signal for the asset.
- QCP Capital shared a similarly bullish long-term outlook for BTC.
Bitcoin [BTC]’The stock’s price has been consolidated between $60,000 and $70,000 for more than six months, with occasional wild drops below $60,000.
While the sideways structure could discourage some players, the Bitcoin Rainbow Chart signaled a solid ‘buy’ opportunity for the asset amid the Fed turnaround.
Source: BM Pro
The chart is a valuation model that uses rainbow colors and past historical patterns to gauge whether the asset is overpriced or underpriced.
The current price action was within the second color band, indicating a great buying opportunity.
More room for BTC to grow?
The relatively low BTC price was further reinforced by one of the leading top indicators of the market cycle: the MVRV Z-score (Market Value to Realized Value). In previous cycles, BTC topped out when the statistic reached 7 to 10.
In short, the current reading of near 1 suggested that there was more room for BTC prices to rise. If so, current BTC prices can be considered a huge bargain.
Source: BiTBO
Speculators’ positioning further reflected this bullish outlook, especially in the futures market. According to Edwards Charles, founder of crypto VC firm Capriole Investments, the markets were in a BTC everlastingl bullish regime.
Source:
For context, bullish perpetual (highlighted in green) indicated rising market leverage and opened perpetual contracts.
It meant more speculators took on additional risks by opening perpetual contracts using leverage. It suggests future expectations for price increases and has historically marked BTC bottoms.
However, using market leverage carries enormous liquidation risk, which could create volatile downside risk.
That said, Bitcoin analyst Willy Woo claimed he was “cautiously optimistic” as the asset has not turned decisively bullish. He said,
“Current supply and demand are neutrally bearish, but signs point to us moving into a bullish structure if some liquidations occur. Cautiously optimistic”
Source: Willy Woo
However, crypto trading firm QCP Capital maintained a bullish long-term outlook for BTC amid the Fed turnaround. It declared,
“The start of an interest rate reduction cycle aimed at normalizing interest rates supports hard assets as a store of value. While declines and high volatility are expected, don’t let this distract you from the path to higher BTC prices.”