Bitcoin Rainbow Chart, Lowest Value Even in Late August is $105,087

▲ Bitcoin (BTC) ©Godasol

An analysis suggests that Bitcoin (BTC) is trading approximately $41,000 below the lowest band of its long-term valuation model, indicating severe undervaluation. However, this is not a price prediction that it will reach $105,087 by August 31, but rather an indicator showing the gap between its historical growth trend and current price.

According to Finbold, a cryptocurrency media outlet, on August 5 (local time), Coinglass's Bitcoin Rainbow Chart presented the bottom 'Fire Sale' band at $105,087 for August 31. The current price is $64,092, meaning it would need to rise by approximately 64% to reach that band within a month.

The Rainbow Chart categorizes value bands based on market cycles and investor sentiment, using Bitcoin's historical logarithmic growth curve. Above 'Fire Sale' are the 'BUY' band at $142,835, the 'Accumulate' band at $196,082, and the 'Still Cheap' band at $264,711. The 'HODL' band, considered fair value in the long-term trend, is $357,361.

The overheating zone begins with 'Is this a bubble?' at $490,961. Following this, the 'FOMO' (Fear Of Missing Out) intensifying zone is set at $676,001, and the strong sell warning zone is $907,502. The top 'Maximum Bubble Territory' is approximately $1.23 million, signifying extreme market optimism and unsustainable speculation.

At the time of writing, Bitcoin was trading at $64,092, up about 1% over 24 hours, but down 0.44% over the week. The price is above the 50-day Simple Moving Average (SMA) of $63,315, indicating a positive short-term trend, but below the 200-day SMA of $70,850, so a long-term upward reversal has not been confirmed. The 14-day Relative Strength Index (RSI) also showed a neutral 50.63. The media emphasized that the Rainbow Chart is not an indicator for predicting short-term price targets, but rather a reference tool showing where the current price stands within the long-term valuation range.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*