The Bitcoin Rainbow Chart has become a universally used analysis tool that helps crypto investors and traders predict BTC’s ever-changing market trends and cycles.
Bitcoin Rainbow Chart BTC Analysis
All year round the price of Bitcoin has seen several upward and downward trends. From the last three months of 2023, the price of BTC has experienced a large increase, with an upper limit $35,000 in October and fly by $44,000 in December.
With the market growing rapidly, many crypto investors and market watchers are looking for various crypto analysis tools to increase their understanding of crypto analysis Bitcoin market trends.
The Bitcoin rainbow chart is one of the many analysis tools available to predict the potential prices of BTC. This color-coded chart is a long-term valuation tool for BTC which uses a logarithmic growth curve to predict the potential price of BTC.
Source: Blockchain Center
Currently, according to the rainbow chart, Bitcoin is located around the ‘Accumulate’ and ‘Still cheap’ zones. This implies that the graph shows the best timeline Buy BTC before the sales phase begins.
The Bitcoin Rainbow Chart simplifies BTC price predictions, allowing investors to identify potential buying and selling opportunities for BTC. However, it is important to note that the Bitcoin Rainbow Chart is not investment advice and does not predict the exact price of Bitcoin.
BTC price readies to retest $43,000 | Source: BTCUSD On Tradingview.com
History of the BTC rainbow chart
The Bitcoin Rainbow Chart started as a fun project created by a Reddit user, Azop, to visually display Bitcoin’s price history. However, the chart became more mainstream after a second version was developed by trader Trololo and turned into a crypto technical analysis tool.
The diagram is designed using a color coding scheme and highlights each of them Bitcoin halving cycle and various BTC price ranges. With its seven color bands, the rainbow chart identifies strategic points to buy, sell or hold BTC.
The dark red band indicates maximum bubble territory, the red band indicates a robust selling phase, while orange and yellow indicate FOMO intensification and HODL periods respectively. The green band indicates a favorable buying and accumulation window and finally the blue color band represents a selling opportunity.
While the Bitcoin Rainbow Chart does not provide financial advice, it is a widely recognized tool used by crypto traders and investors to gain an easier understanding of BTC market movements. Ultimately, the accuracy of the graph’s predictions depends on how it is applied and in what context.
Featured image from Crypto.com, chart from Tradingview.com
Disclaimer: The article is for educational purposes only. It does not represent NewsBTC’s views on buying, selling or holding investments and of course investing involves risks. You are advised to conduct your own research before making any investment decisions. Use the information on this website entirely at your own risk.