Bitcoin Magazine Bitcoin Rainbow Chart Signals ‘Fire Sale’ Zone as BTC Enters Undervalued Territory Bitcoin has dropped into historically “fire sale” levels onBitcoin Magazine Bitcoin Rainbow Chart Signals ‘Fire Sale’ Zone as BTC Enters Undervalued Territory Bitcoin has dropped into historically “fire sale” levels on

Bitcoin Rainbow Chart Signals ‘Fire Sale’ Zone as BTC Enters Undervalued Territory

Bitcoin Magazine
Bitcoin Rainbow Chart Signals ‘Fire Sale’ Zone as BTC Enters Undervalued Territory

Bitcoin’s price has plunged into zones historically tagged by long‑term valuation models as “fire sale” levels, according to the latest Bitcoin Rainbow Chart from Bitcoin Magazine Pro. The sentiment‑laden nomenclature — often shared jokingly in bitcoin circles — now has a more serious undertone amid one of the deepest corrective phases in recent cycle history.

The Bitcoin Rainbow Chart is a long‑term logarithmic valuation tool and it overlays price against a spectrum of colored bands, historically interpreted as oversold, fairly valued, or overbought. 

After an extended drawdown from cycle highs, Bitcoin’s price now sits in one of the lower bands traditionally associated with deep undervaluation — colloquially referenced as “fire sale” territory. 

At the time of writing, BTC is struggling at the $83,000 level, after months of repeated sell-offs. BTC has shed roughly 30% of its value since early October 2025, trading as low as the $80,000s — triggering widespread leveraged liquidations.

A multibillion-dollar cascade wiped out leveraged positions, with BTC alone accounting for close to $960 million in forced exits in a single session, according to BM data.

BTC plunged to lows around $81,000 last evening, dropping roughly 10% from 48-hour highs above $90,000 amid macro uncertainty and fragile market structure, according to Bitcoin Magazine Pro data. 

The sharp reversal followed the Federal Reserve meeting, where Powell highlighted labor market resilience without signaling urgent policy easing, turning the event into a “sell the news” moment for speculative assets.

Meanwhile, next week the White House will convene banking and crypto executives to discuss reviving stalled U.S. crypto legislation.

Is this sale the bottom for bitcoin?

BTC has plunged below its two-month-long safety net at the 100-week moving average around $85,000, signaling sellers have taken control. 

Traders are now eyeing $75,000 as the next key support level, while a drop toward the 200-week average near $58,000 could trigger further losses. 

Broader market turmoil, including a massive $357 billion drop in Microsoft’s value and concerns over AI investments, has spooked broader investors and liquidated $1.6 billion in crypto long positions. 

Over the last two days, gold prices reversed sharply from record highs above $5,500, falling back below $5,000 at times as investors booked profits and reacted to a firmer U.S. dollar. 

Silver plunged over 20% at times. The volatility in both metals highlights a broader market correction after historic gains, with sharp pullbacks testing the sustainability of the early‑year rally.

This post Bitcoin Rainbow Chart Signals ‘Fire Sale’ Zone as BTC Enters Undervalued Territory first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

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