Bitcoin price enters ‘fire sale’ zone – Is the BTC bottom near?

Bitcoin’s [BTC] current valuation sits at the lowest end of the rainbow model, extending a decline that has moved the price below its historical trend. The metric normally categorizes the price of BTC based on valuation bands using the relationship of market price to long-term growth trend.

As the price falls further below that trend, Bitcoin moves through progressively cheaper bands, ending with the “fire sale” zone. At press time, BTC traded 66% below the $186,700 model price, thus placing it beneath that lowest band.

Supporting this deviation, the volatility-adjusted Z-Score has fallen to -2.293, below the 2022 low of -1.979. Simply, this indicates there is a greater chance of discount when considering differences in volatility across cycles.

Historically, similar extremes have aligned with accumulation periods. Yet, despite that, they do not technically identify the final bottom. However, a recovery above the lowest band would instead indicate that Bitcoin is beginning to close its valuation gap.

Bitcoin cycle nears previous bottoming windows

While the Rainbow model shows where Bitcoin sits relative to its long-term valuation trend, cycle duration provides a different perspective. The current cycle has reached day 1,363, while the previous two recorded bottoms around days 1,432 and 1,436.