Bitcoin's full price history plotted against its logarithmic power law regression. Each coloured band represents a valuation zone — from deep discount at the bottom to extreme bubble territory at the top. The dashed future extension projects the bands forward, not prices.
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The Rainbow Chart overlays Bitcoin's full price history on a logarithmic regression model fitted to data going back to 2009. On a logarithmic scale, Bitcoin's price growth has traced a remarkably consistent straight line over time. The coloured bands are fixed multiples of this power law trend line — they don't shift based on recent price action, which makes them a stable long-term reference.
Bottom bands (blue/indigo): When price dips into the Fire Sale or BUY! bands, Bitcoin is trading significantly below its historical growth trend. These zones have consistently rewarded patient buyers over the following 12–24 months. The further into the blue bands, the stronger the historical signal.
Middle bands (green/yellow): Price is near fair value relative to the long-term trend. These are the "hold and DCA steadily" zones — no extreme signal in either direction.
Top bands (orange/red): Price is well above its historical growth trend. Late-stage bull market territory. Past cycles have seen sharp corrections follow from these bands. The further into the red, the more caution is warranted.
The future projection (dashed): Shows where the bands will be in the coming year if Bitcoin's logarithmic growth trend continues. This is not a price prediction — it shows where "fairly valued" would be at a future date if the trend holds. The bands themselves are the reference; not a guarantee.
Important limitation: The Rainbow Chart is a model, and all models have limits. Bitcoin could eventually break its long-term logarithmic regression either upward or downward. Use it as one signal among several, not as a standalone guarantee of future price behaviour.
For a different angle on the same long-term story, see the 200-Week MA which measures the same cycle position using a simpler moving average approach.