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While the attention of the general public has shifted from Bitcoin, drifting in a sideways range, to more volatile assets, its long-term metrics have completed the transition into a phase of a deep cyclical bottom.
The analytics platform Lookonchain has detected a synchronization that in past macro cycles opened the door to the largest rallies: the asset's price has simultaneously dropped into zones of strong undervaluation on the Dynamic Rainbow Chart and on the 200-week moving average heatmap (200WMA Heatmap).
Historically, this moment means one thing: retail speculators have finally lost interest in the prolonged flat, giving way to steady accumulation by large strategic players.
Bitcoin's current trajectory within the Dynamic Rainbow Chart model is calculated by a strict Power Law regression, which has described the asset's behavior since 2012 with an accuracy of 94.3%.
Right now, BTC's price chart is literally pressed against the very bottom of this mathematical rainbow, stuck at the junction of the "BUY!" and "Basically a Fire Sale" ranges. From the model's perspective, the price is compressed to the limit and offers investors the maximum discount to fair value, while the theoretical peak of the next overheated market has gone far beyond the $1,000,000 mark.
The second independent argument in favor of a global floor forming is the 200-week moving average heatmap, developed by Look Into Bitcoin. The indicator evaluates the growth rate of this 4-year support line and colors the chart points in a spectrum from purple to bright red.
Blue light for "whales": why a boring flat is an investor's best friend
Throughout its history, Bitcoin has dropped to this boundary only four times, at moments of the crowd's maximum pessimism: in 2015, 2018, 2020, and 2022. Now the chart points have turned a cold blue again.
For the market, this is the main marker of stability, confirming that speculative froth and excess leverage have been completely flushed out of the system, and that panic sentiment has given way to cool-headed anticipation.
The synchronous signal from the Dynamic Rainbow and the 200WMA proves that the long-term trend has completely cleared of short-term market noise. While retail players tire of the lack of sharp movements, large funds are using the lull to their advantage.
For investors who use the DCA (dollar-cost averaging) method, such periods of boring sideways price movement in the "blue" zones have always been the strongest trigger for calmly building positions before the start of a new uptrend.
Arman Shirinyan
Dan Burgin
