The Bitcoin Rainbow Chart in Plain English
The Bitcoin Rainbow Chart overlays a set of colored bands on a logarithmic regression of Bitcoin's long-term price. Each band represents a sentiment zone — from "Fire Sale" and "Accumulate" at the bottom to "Bubble" and "Maximum Bubble" at the top. See it live on our Rainbow Chart page.
Why Logarithmic?
Bitcoin has grown by orders of magnitude over its history, so a normal (linear) chart squashes early years into a flat line. A logarithmic scale shows percentage moves consistently, which is why long-term Bitcoin models almost always use it.
How to Read the Bands
- Cool colors (blue/green): historically undervalued zones — "fire sale" and "accumulate".
- Middle (yellow): fair value / "hold".
- Warm colors (orange/red): historically overvalued — "is this a bubble?" and "maximum bubble".
How to Use It (and Its Limits)
The Rainbow Chart is a fun, big-picture sentiment guide — not a precise model. It's fitted to past data and the bands shift over time, so don't treat it as a guarantee. Use it alongside the Fear & Greed Index, on-chain bottom indicators, and the Bear Market Clock for a fuller picture of where Bitcoin sits in its cycle.