The Bitcoin Rainbow indicator is consolidating at the lowest point as BTC aims to reclaim $17,000

Bitcoin (BTC) appeared poised to reclaim the crucial $18,000 support level after briefly breaking the $17,000 position, with bulls pressured to show strength. Since then, however, the asset has fallen below $17,000 as the sell-off in the broader crypto market continues.

Remarkably, the first cryptocurrency has been consolidating over the past few weeks, which is mainly characterized by sideways movement in prices as investors look for possible indicators that are likely to determine the next price move.

In this regard, the Bitcoincenter rainbow price chart is one of the tools that investors use to monitor the Bitcoin price outlook. The tool uses color bands that follow logarithmic regression and examines past performance to provide potential insight into its long-term movements.

On December 7th, the Bitcoin indicator on the Rainbow chart had reached its lowest point below the “Essentially a sell-off” level, represented by the color blue. The asset has consolidated in the position after being stuck in the zone for several weeks.

Bitcoin Raibow chart. Source: BlockchainCenter

The ongoing consolidation on the charts suggests that Bitcoin has found a bottom and faces the potential for a rally in the near future. Along that line, as reported by Finbold, the cryptocurrency could be preparing for an imminent bottom and major rally based on the recent two-week cross of Bitcoin’s moving average convergence divergence (MACD).

It is worth noting that Bitcoin last hit the level in March 2020 before embarking on a bull run that culminated in last year’s all-time high of nearly $69,000.

Bitcoin price analysis

As of today, Bitcoin is changing hands at $16,804 after correcting about 1% in the past 24 hours. The weekly chart shows that the price of BTC peaked at $17,300 on December 5th.

Bitcoin seven-day price chart. Source: Finbold

For now, bears have more strength and continued pressure on the $16,800 support could see bitcoin fall further to around $16,400.

Bitcoin’s next price action

Notably, Bitcoin has consolidated below $17,000 as investors continue to monitor risk-related news likely to impact Bitcoin.

Alongside the fallout from the FTX crypto exchange collapse, investors will be watching the December 13 inflation data given that some of BTC’s poor performance is related to prevailing macroeconomic factors.

Disclaimer: The content of this website should not be construed as investment advice. Investing is speculative. When investing, your capital is at risk.

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