- Bitcoin Rainbow Chart shows the accumulation of BTC signals.
- Forecasting models and analysts predict a major BTC rally in the coming months.
Bitcoin [BTC] rose more than 68% in the first quarter of 2024, but second-quarter headwinds have wiped out some of the gains. With BTC down 7% in the second quarter and remaining within the $60,000 to $71,000 price range, it is critical to gauge whether it is overvalued or undervalued using the Bitcoin Rainbow Chart.
On a YTD (Year-to-Date) basis, BTC has added over $22,000, which translates into a 50.3% gain. However, second-quarter headwinds, including interest rate fears and tensions in the Middle East, spooked investors and partly explained last week’s declines.
Now that Bitcoin is back above $66,000, the big question is: is it too expensive, or is its current value a bargain?
Bitcoin Rainbow Chart Signal “Accumulating”
Source: Source: Look at Bitcoin
According to the Bitcoin Rainbow GraphicBTC’s current price level was within a zone called ‘accumulate’.
The Bitcoin Rainbow Chart visually displays the valuation of Bitcoin based on historical data. Specifically, it is a logarithmic scale with color bands representing the buying (blue, green) and selling (orange, yellow) zones.
Over the past three halving cycles, BTC has been massively undervalued immediately after the halving. Although the current BTC price level on the scale is slightly higher than recent cycles, it is within the ‘accumulation zone’.
According to the Bitcoin Rainbow Chart, BTC is still undervalued and not overheated.
Moreover, the Stock-to-Flow (S/F) fashion model indicates more upside potential for Bitcoin’s price. The model evaluates the future prices of BTC by dividing the circulating supply by the annual number of coins mined.
The model has been able to predict BTC prices with reasonable variation in the past. It predicts that BTC will cross $100,000 in the third quarter of 2024 and reach over $450,000 by the end of 2025.
Source: Look at Bitcoin
However, given the new US spot BTC ETF factor and macroeconomic pressures, comparing S/F projections with nuanced expert analysis can also provide crucial insights.
Why Analysts Think BTC Could Reach $200,000 in 18-24 Months
Interestingly, Standard Chartered predicts that Bitcoin could reach $200,000 in the next 18 to 24 months.
In a recent one interviewGeoff Kendrick, head of digital asset research at Standard Chartered, saw the maturity of spot BTC ETFs as a driving factor;
“I expect that from the beginning of this year until when the ETF market matures in the US market, you will see inflows of between $50 billion and $100 billion. So far we have $12 billion. That could happen within 18 to 24 months.”
Due to the correlation between BTC ETFs and gold, Kendrick noted that the price of gold rose 4.3x as ETF flows matured. According to Kendrick, if BTC ETF flows follow the path of gold, then
“That could take us into the $150,000 – $200,000 range.”
Similarly, in mid-March, Bernstein analysts revised the BTC price projection from $90,000 to $150,000 by mid-2025, citing “higher-than-expected” flows from spot BTC ETFs.
According to Ki Young Juthe founder of CryptoQuant, ‘new whales’ have now doubled their BTC accumulation.
“The new whales’ initial investment in #Bitcoin is almost double the cumulative total of the old whales.”
Source: X/Ki Joung Yu
However, the huge demand for whales is not the only good news for BTC’s future prices. The macro overview is also coordinated.
BitMEX founder and CIO of Maelstrom, Arthur Hayes, foresees a favorable summer for BTC, citing the problems in the “government bond market”. In a recent blog called ‘Left Curve’ the CIO said noted;
“Rarely in the market do the things that got you here (Bitcoin from zero in 2009 to $70,000 in 2024) get you there (Bitcoin to $1,000,000). However, the macro setup that created the fiat liquidity wave that powered Bitcoin’s rise will only become more apparent as the sovereign debt bubble begins to burst.”
The CIO accurately predicted last week’s massive sell-off, citing US tax season and Bitcoin’s halving.
While tensions in the Middle East also played a role in last week’s price declines, Hayes’ projections show that the macro view looks good for Bitcoin from the summer.
Read Bitcoin [BTC] price prediction 2024 -2025
That said, Bitcoin price prediction models, including the Bitcoin Rainbow Chart and analysts, all point to further upside for BTC in the coming months.
If these predictions are confirmed, current BTC prices will be a huge bargain.