With Bitcoin (BTC) struggling to hold above $98,000 amid a lack of strong fundamental catalysts, market sentiment has turned increasingly cautious.
The release of hotter-than-expected CPI data has fueled concerns over inflation, pushing BTC toward $95,000 and raising fears of a potential drop to $90,000 in the coming days.
At press time, Bitcoin is trading at $95,506, reflecting a 0.53% daily loss and a 2.5% decline over the past week.
Amid growing uncertainty, the Bitcoin Rainbow Chart offers a historical perspective on potential price movements, providing insight into where BTC could be headed as February 2025 unfolds.
Bitcoin Rainbow chart analysis
The Bitcoin Rainbow Chart categorizes Bitcoin’s price into nine distinct color-coded zones, each representing different market sentiments and price ranges.
These zones range from extreme lows, where Bitcoin is viewed as significantly undervalued, to extreme highs, which may indicate a speculative bubble and suggest a potential market correction.
Currently, Bitcoin remains in the ‘HODL!’ zone, signaling a neutral market sentiment. At this level, neither a sharp sell-off nor a sudden rally is expected, keeping investors on edge as they await the next major price movement.
Key levels to watch for February 28, 2025
According to the projection, Bitcoin is expected to stay in the ‘HODL!’ zone by the end of the month as long as it trades between $90,270.24 and $118,853.07.
This range indicates a stable market sentiment, where Bitcoin is neither considered undervalued nor at risk of entering extreme speculative territory.
If Bitcoin falls below $90,270.24, investors looking to increase their exposure could see a more attractive buying opportunity.
Such a drop would push BTC into the ‘Still Cheap’ zone, historically an accumulation phase, where stronger buying interest tends to emerge, particularly at $69,519.91, $53,555.91, and $39,509.02.
However, a decline below $30,085.74 could signal a fundamental shift in market conditions, raising the risk of a broader bearish trend.
On the other hand, crypto traders who have already secured profits may start considering partial exits if Bitcoin surpasses $118,853.07, a level that could fuel increased speculation.
A more pronounced bubble warning emerges above $152,160.16, where FOMO-driven buying could accelerate.
Overall, the Bitcoin Rainbow Chart suggests that by the end of February, BTC is likely to either remain in the ‘HODL!’ zone or drift toward the accumulation zone, presenting ongoing buying opportunities for long-term investors.
AI-driven projections offer optimism
A recent Finbold report, leveraging AI-driven price predictions, forecasts a bullish scenario for Bitcoin, with models setting an average price target of $104,000 by February 28, 2025.
This projection strengthens expectations that Bitcoin will likely remain within its current range rather than making an aggressive move into speculative territory.
While macroeconomic factors continue to weigh on sentiment, AI-based forecasts indicate that Bitcoin still holds upside potential in the near term.
Featured image via Shutterstock
