Question 1

What is the Bitcoin Rainbow Chart?

Accepted Answer

The Bitcoin Rainbow Chart is a long-term valuation tool for Bitcoin. It uses a logarithmic growth curve to suggest potential future price directions.It overlays rainbow-colored bands on this curve, with each band reflecting a different phase of market sentiment as the price moves through it—highlighting possible buying or selling opportunities.So far, Bitcoin's price has consistently remained within the rainbow bands of the logarithmic growth curve.

Question 2

What does each Bitcoin Rainbow Chart band mean?

Accepted Answer

Dark blue (Fire sale): Reflects extreme undervaluation, offering rare optimal buying opportunities.Light blue (Buy): Indicates undervaluation, considered a good time to buy.Green (Accumulate): Fair value range; suitable for long-term investment.Light green (Still cheap): Not at the lowest level, but still worth gradual accumulation.Yellow (HODL!): Suggests fair valuation; best to maintain current positions.Orange (Is this a bubble?): Warns of potential overvaluation; caution is advised.Dark orange (FOMO intensifies): Shows heavy buying activity; historically a sign to start selling.Light red (Sell. Seriously, sell!): Early bubble phase; strongly suggests overvaluation.Red (Maximum bubble territory): Signals peak overvaluation; a strong sell indicator.This chart provides investors with a clear view of historical price behavior, helping them make more informed decisions.

Question 3

How to interpret the Bitcoin Rainbow Chart?

Accepted Answer

As Bitcoin is still a relatively young asset class, its price remains highly volatile. While long-term adoption trends point to overall price appreciation, Bitcoin continues to go through market cycles. During these cycles, its price has experienced multiple sharp rises and deep pullbacks. It also shows significant daily volatility, which investors should keep in mind.The BTC Rainbow Chart highlights where Bitcoin's price sits within these cycles and offers perspective for investors. As noted earlier, the chart and its labels are meant for illustrative purposes only and do not constitute investment advice.Warmer colors at the top of the chart suggest the market may be overheated. Historically, these phases have often been good times for strategic investors to take profits.When BTC's price moves into cooler colors, overall market sentiment is usually low, and many investors lose interest in Bitcoin. The chart emphasizes that these periods typically present excellent opportunities for strategic investors to accumulate more Bitcoin. The Bitcoin Rainbow Chart is updated every 24 hours with the latest daily closing price.

Question 4

How to use the Bitcoin Rainbow Chart?

Accepted Answer

To use the Bitcoin Rainbow Chart effectively, investors should make it part of their broader market analysis strategy. It should not serve as the sole basis for investment decisions, but rather as one of several tools. By combining insights from the chart with other market indicators, investors can gain a clearer view of potential price movements. It is also important to consider the broader economic context, including overall market trends and news that may affect Bitcoin's price. The following steps can help investors make the most of the chart:Monitor the chart regularly to track Bitcoin's current position within the bands.Compare past and present trends to better evaluate where the indicator sits within the Bitcoin Rainbow Chart model.Use the chart alongside other technical analysis tools for a more comprehensive view.Stay alert to market sentiment and news that could influence Bitcoin's price.Be ready to adjust your strategy based on insights from the chart.What are the limitations of the Bitcoin Rainbow Chart?While the Bitcoin Rainbow Chart can be a valuable tool, it's important to recognize its limitations. The chart is built on historical data and trends, which do not necessarily predict future performance. Market conditions can shift quickly due to factors such as regulatory developments, technological changes, and shifts in investor behavior. Therefore, the Rainbow Chart should be used as part of a broader research approach. Key considerations include:The chart does not account for sudden market shifts or black swan events.It should not replace fundamental analysis, which looks at the core factors driving Bitcoin's price.Relying on the chart alone may lead to missed opportunities or greater risk.Interpret the chart with caution, as the model can deviate under extreme conditions.Regularly update your investment thesis as new information emerges.

Question 5

Who created the Bitcoin Rainbow Chart?

Accepted Answer

The Bitcoin Rainbow Chart first appeared in the crypto community on the BitcoinTalk forum in 2014 and later gained widespread attention on Reddit's r/bitcoin. Its exact creator remains unknown, as the chart was gradually developed and refined through the collaborative efforts of many individuals. Today, it stands as a collective contribution from the broader crypto community.

Time	BTC price	Fire sale	Buy	Accumulate	Still cheap	HODL!	Is this a bubble?	FOMO intensifies	Sell. Seriously, sell!	Maximum bubble territory
2026/6/1	-	$97,233	$132,159	$181,427	$244,927	$330,651	$454,266	$625,477	$839,676	$1,142,206
2026/5/31	-	$97,139	$132,031	$181,252	$244,691	$330,332	$453,828	$624,874	$838,866	$1,141,105
2026/5/30	-	$97,045	$131,904	$181,077	$244,455	$330,014	$453,391	$624,271	$838,057	$1,140,004
2026/5/29	-	$96,952	$131,777	$180,903	$244,219	$329,695	$452,953	$623,669	$837,249	$1,138,904
2026/5/28	-	$96,858	$131,649	$180,728	$243,983	$329,377	$452,516	$623,067	$836,441	$1,137,806
2026/5/27	-	$96,765	$131,522	$180,554	$243,748	$329,059	$452,080	$622,466	$835,634	$1,136,708
2026/5/26	-	$96,671	$131,395	$180,380	$243,513	$328,742	$451,643	$621,865	$834,828	$1,135,611
2026/5/25	-	$96,578	$131,269	$180,206	$243,277	$328,425	$451,207	$621,265	$834,022	$1,134,515
2026/5/24	-	$96,485	$131,142	$180,032	$243,043	$328,108	$450,772	$620,665	$833,217	$1,133,419
2026/5/23	-	$96,392	$131,015	$179,858	$242,808	$327,791	$450,337	$620,066	$832,412	$1,132,325

Bitcoin Rainbow Chart