According to BlockBeats, on August 15th, CryptoQuant analyst Axel Adler Jr. stated that Bitcoin is currently trading at the lowest point of the Rainbow Chart model—"basically a sell-off price." This represents an extreme discount relative to the long-term model's price trajectory. This doesn't simply measure how much Bitcoin has fallen. The Rainbow Chart model compares Bitcoin's current price to its long-term trajectory, so this difference reflects the degree to which the market has deviated from historical trends.
The volatility-adjusted Z-Score is currently -2.293—the lowest reading since 2016, and also lower than the -1.979 at the bottom of the 2022 bear market. This indicator takes into account the differences in volatility across different market cycles. Therefore, this comparison suggests that the current relative model's downside deviation has exceeded that of the previous bear market bottom.
Bitcoin is currently trading at an extreme discount, with its volatility-adjusted Z-Score hitting a 10-year low. This indicates a degree of undervaluation within the model, but it doesn't necessarily confirm a final bottom. The extremely low valuation points to a potentially attractive range, but a market reversal still requires separate confirmation.
Note: Z-Score is a commonly used standardized metric in statistics, used to measure how far a data point is from the mean, expressed in "standard deviation".