Bitcoin Rainbow Chart Predictions: BTC to $450,000 by 2025?
Bitcoin Rainbow Chart shows the accumulation of BTC signals. Prediction models and analysts are predicting a major BTC rally in the coming months.
Bitcoin [BTC] rallied more than 68% in Q1 2024, but Q2 headwinds have eaten into some of the gains. With BTC falling 7% in the second quarter and stuck within the $60,000 to $71,000 price range, it is crucial to assess whether it is overvalued or undervalued using the Bitcoin Rainbow Chart.
So far this year, BTC has added over $22,000, which translates to gains of 50.3%. 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 the current value a bargain?
Bitcoin Rainbow Chart “Accumulate” Signal
According to the Bitcoin Rainbow Chart, the current BTC price level was within a so-called “accumulated” zone.
The Bitcoin Rainbow Chart visually represents the valuation of Bitcoin based on historical data. In particular, it is a logarithmic scale that includes colored bands that show the buy (blue, green) and sell (orange, yellow) zones.
In the last three halving cycles, BTC was massively undervalued immediately after the halving. Although the current BTC price level is slightly higher on the scale than the last few cycles, it is within the “accumulation” zone. Therefore, BTC is still undervalued and not overheated, according to the Bitcoin Rainbow Chart.
Furthermore, the Stock-to-Flow (S/F) model indicates further upside potential for the price of Bitcoin. The model evaluates future BTC prices by dividing its circulating supply by the annual number of coins mined.
The model has been able to predict BTC prices with a fair variance 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. However, given the new US BTC Spot ETF factor and macroeconomic pressures, crossing S/F projections with nuanced expert analysis can also offer crucial insights.
Why Analysts Believe BTC Can Reach $200,000 in 18-24 Months
Interestingly, Standard Chartered predicts that Bitcoin may reach $200,000 in the next 18 to 24 months. In a recent interview, Geoff Kendrick, head of digital asset research at Standard Chartered, saw the maturity of BTC spot ETFs as a determining factor.
Correlating BTC ETFs and gold, Kendrick noted that the price of gold rose 4.3x as its ETF flows matured. According to Kendrick, if the BTC ETF flows expiration follows the path of gold; therefore, “that could take us into the $150,000 to $200,000 range.”
According to CryptoQuant founder Ki-young-juel, the “new whales” have now doubled down on their BTC accumulation spree. However, massive whale demand is not the only good news for BTC future prices. The macro overview is also aligned.
BitMEX founder and Maelstrom CIO Arthur Hayes predicts a favorable summer for BTC, citing “sovereign bond market” issues. The CIO accurately predicted last week’s sell-off, citing the US tax season and the Bitcoin halving.
Although tensions in the Middle East also played a role in last week’s declines, Hayes’ projections show that the macroeconomic outlook looks excellent for Bitcoin heading into the summer.
Bitcoin price prediction models, including the Bitcoin Rainbow Chart and analysts, point to further upside for BTC in the coming months. If these predictions are confirmed, then the current BTC prices will be a great bargain.
By Audy Castaneda