1、What Is the Bitcoin Rainbow Chart Indicator?
The Bitcoin Rainbow Chart is a long-term, logarithmic valuation model used to visualize Bitcoin's historical price movements and market sentiment over time. It overlays a rainbow-colored band across a logarithmic growth curve, with each color representing a specific sentiment zone—ranging from undervalued to overvalued conditions.
This chart is updated daily to reflect the latest BTC closing price
making it a useful macro indicator for investors and traders assessing Bitcoin’s potential buy or sell zones across market cycles.
Color Bands and Market Sentiment:
- Dark Blue – "Basically a Bargain Sale" → Indicates Bitcoin is severely undervalued.
- Blue – "Buy Now!" → Signals Bitcoin is clearly undervalued.
- Green – "Overweight" → Suggests the asset is still undervalued.
- Light Green – "Still Cheap" → Slightly undervalued, showing early bullish potential.
- Yellow – "HODL Zone" → Reflects a fair or reasonable valuation.
- Orange – "Is This a Bubble?" → Bitcoin may be entering overvalued territory.
- Light Red – "FOMO Zone" → Price is likely overextended, driven by hype.
- Red – "Sell Now!" → Strong signal of serious overvaluation.
- Deep Red – "Maximum Bubble Zone" → Indicates an extreme overvaluation, historically followed by sharp corrections.
2、How to View the Bitcoin Rainbow Chart on Coinglass
- Open your web browser and go to coinglass.com.
- On the homepage, navigate to the top menu and click on [Data].
- From the dropdown menu, select [Bitcoin Rainbow] to view the interactive chart.
Disclaimer
This article is not intended to provide
(I) investment advice or investment recommendations;
(Ii) an offer or solicitation to buy, sell or hold digital assets;
(Iii) Financial, accounting, legal or tax advice. Digital assets held (including stablecoins and NFTs) involve high risk and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is appropriate for you based on your financial situation. Please consult your legal/tax/investment professional for your specific situation. Please be responsible for understanding and complying with relevant local applicable laws and regulations.