Investor confidence in Bitcoin [BTC] has waned somewhat, as the cryptocurrency king struggles to surpass the $69,000 mark. Nevertheless, the Bitcoin Rainbow Chart indicates that BTC is actually mirroring the post-halving trend of 2020.
Is it the right time to buy Bitcoin?
Bitcoin’s price volatility has decreased over the past few days, causing concerns as BTC continues to battle the $69,000 resistance.
However, investors shouldn’t be discouraged, as BTC is exhibiting patterns similar to those following the 2020 halving. Analysis shows that several months after the third halving, the Bitcoin Rainbow Chart signaled a “BUY” zone. After spending a few months in this zone, BTC’s price soared.
A similar trend is visible in BTC’s 2024 Rainbow Chart, which also indicates a buying opportunity. If this is taken into account, it might be the last chance for investors to purchase BTC at a lower price before it climbs and enters the accumulation and HODL zone.
Bitcoin Rainbow Chart
Source: BLOCKCHAINCENTER
Subsequently, we analyzed BTC’s on-chain metrics to determine if investors should consider buying BTC as suggested by the Rainbow Chart. We observed that BTC’s outflows from exchanges decreased last week after a spike on May 24th. Its supply on exchanges increased, indicating that investors opted to sell.
Our review of CryptoQuant data reveals that BTC’s net deposits on exchanges have been high compared to the seven-day average, further suggesting strong selling pressure. Moreover, Coinbase Premium is in the red, indicating a prevailing bearish sentiment among U.S. investors.