Bitcoin has fallen to its lowest valuation according to the Rainbow Chart model, which is based on long-term price trends. Its volatility-adjusted Z-score has also dropped to its lowest level in the past 10 years.
CryptoQuant analyst Axel Adler Jr. stated that Bitcoin is trading in a range that can be described as a "panic selling price" on the Rainbow Chart. According to the analyst, the current price indicates an extremely high level of discount compared to the long-term price trajectory within this pattern.
The Rainbow Chart measures not only Bitcoin's price decline. The model compares the current price with the long-term historical trend, showing how much the market has deviated from this trend.
According to the data, the volatility-adjusted Z-score has fallen to -2.293. This is the lowest level recorded for this indicator since 2016. During the market downturn in 2022, the indicator was -1.979.
In the analyst's view, this indicator, which accounts for volatility fluctuations across different market cycles, suggests that Bitcoin's current bearish divergence has surpassed the level observed at the bottom of the previous bear market.
However, the extremely low valuation does not definitively confirm that the absolute bottom has been reached. Although current prospects point to a potentially attractive price range within the model, data from other indicators is necessary to confirm that the market has changed direction.
*This is not investment advice.
