In recent months, the Bitcoin market has shown volatility, and analysts have focused on two important tools: the Bitcoin Rainbow Chart and the NUPL metric. These indicators provide new insights into the potential for price growth or decline of the cryptocurrency.
History and Current State of Bitcoin
A year ago, Bitcoin was trading around $25.7k. Since then, much has changed, especially after rumors of a spot ETF approval and the apparent peak of inflation. These changes increased investor interest and contributed to the subsequent record price rise in March 2024 to $73.7k.
Rainbow Chart: What Does the Chart Predict?
The Bitcoin Rainbow Chart is used for long-term analysis of price trends in the Bitcoin market. Using a logarithmic scale, this chart helps investors make decisions about buying, selling, or holding assets. Despite recent drops into the 'Bitcoin is dead' zone, the chart indicates a current favorable buying zone and potential growth in late October, reminiscent of previous cycles.
Challenges and Opportunities with NUPL
The Net Unrealized Profit/Loss (NUPL) metric is currently at 0.47, indicating that the market cap is larger than the realized cap. Despite this, as prices decline, the desire to sell from profitable holders is likely decreasing, which could open up opportunities for growth in the coming months.
Considering the analytical data from the Bitcoin Rainbow Chart and NUPL, experts continue to discuss opportunities and risks in the Bitcoin market. Forecasts promise an interesting end of the year for the cryptocurrency.