Bitcoin Market Update

Bitcoin (BTC) has been on a slow recovery since mid-March. Moves to the upside are limited and currently involve multiple unsuccessful attempts to breach local resistance levels before a decisive break occurs.

The leading cryptocurrency, trading at $86,470, is down 9.74% since the start of the year.

Prices have bounced off resistance between $88,470 and $88,200 three times in the past week, while a support level has been established in the $86,220 to $86,460 range.

Despite occasional spikes in short positions, long-term BTC holders, who have significantly reduced their liquidations since the start of the year, maintain a strongly bullish outlook.

However, sentiments surrounding BTC’s near-term prospects remain mixed. A closer look at the Bitcoin Rainbow Chart could provide additional insights.

Bitcoin Rainbow Chart Analysis

The Bitcoin Rainbow chart is a visual tool that utilizes a logarithmic growth curve overlaid on price action to depict investor sentiment. It is divided into nine color-coded zones, each corresponding to a specific price range at any given time.

These zones range from ‘Bitcoin is dead’ at the low end to ‘Maximum Bubble Territory’.

Currently, prices are at the higher end of the fourth zone from the bottom, in the ‘Still Cheap’ zone. A move above $92,411 would place the cryptocurrency in the ‘HODL!’ zone.

To stay in the ‘Still Cheap’ zone on April 30, BTC would need to trade in the $73,358 to $95,164 range, corresponding to a 15.16% downside and 10.05% upside.

Should sentiment turn bullish, the cryptocurrency could enter the ‘HODL!’ zone, equating to the $95,164 to $125,174 range at the end of April.

If the price falls below $73,358, a more attractive opportunity for long investors may arise.

What is the likely outcome? Since the start of the year, BTC has been in either the ‘Still Cheap’ or ‘HODL’ zones. Moreover, breaking above local resistance and retesting the all-time high price of approximately $108,000 would put it firmly in the ‘HODL!’ zone. Thus, the $95,164 to $125,174 range seems to be the most realistic forecast for April 30.

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