Over the last seven months, Bitcoin [BTC] has been range-bound between $60K and $70K. Despite the relatively uneventful price movements, the current value of BTC still presents an excellent buying opportunity ahead of an historically bullish fourth quarter.
The Bitcoin Rainbow Chart continues to show that BTC’s present value remains situated within the ‘buy’ zone.
From March onwards and through subsequent retracements, BTC has consistently stayed within the ‘accumulate’ and ‘buy’ zones.
Essentially, the Rainbow Chart assesses BTC’s valuation based on past prices but displays it using a visual spectrum of rainbow colors.
Lower spectrum bands indicate undervaluation of BTC, while higher bands suggest overheating of the market and the potential for corrections.
Is BTC Still Priced at a Discount?
Other important valuation indicators also indicate that Bitcoin is relatively ‘inexpensive’ at its current value.
As per the Pi Cycle Top indicator, BTC still has room to run in this cycle, evident from the considerable gap between the 111-day Moving Average (MA) and the 350-day MA multiple (350 DMAx2).
For those unfamiliar, the Pi Cycle Top metric has accurately predicted BTC cycle tops with a remarkable 3-day precision. Generally, cycle tops have occurred when the 111 DMA surged and surpassed the 350DMAx2.
The substantial gap currently indicates the potential for the bull run of BTC to continue.
In essence, Bitcoin is currently undervalued, as reaffirmed by the Puell Multiple, which assesses the pricing of BTC based on miners’ profitability.
When in the green zone, BTC is considered undervalued, while the upper zone suggests an overheated market.
Based on the current reading, 0.73, it is evident that BTC is significantly underpriced, offering an attractive opportunity for investors.
Additionally, prominent figures in the industry and major firms have projected high price targets for BTC by the end of 2024 and 2025. Standard Chartered Bank, for instance, has forecasted that the asset could reach $250K by 2025.
Similarly, CK Zheng, the founder of the crypto-focused hedge fund ZX Squared Capital, has predicted that BTC will hit an all-time high in the fourth quarter of 2024, regardless of the outcome of the US elections.
He attributes this projection to the high levels of US national debt and fiscal deficits, foreseeing BTC becoming more appealing amid the Federal Reserve’s rate cut cycle.
If these forecasts materialize, the fourth quarter of 2024 and 2025 could potentially offer substantial returns on BTC, potentially breaking the seven-month price range. In such a scenario, the current valuation of BTC may be considered significantly undervalued.