Rainbow Chart Bitcoin
The Bitcoin Rainbow Chart uses logarithmic regression bands to visualize whether Bitcoin is currently undervalued, fairly priced, or in bubble territory — with live price data.
Rainbow Band Indicator
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Band values are illustrative based on current price ratios. Actual Rainbow Chart bands are calculated using logarithmic regression from Bitcoin's genesis block.
Rainbow Chart Price Projections
The Rainbow Chart's median trend line grows at approximately 25% per year.
| Year | Fair Value (HODL Band) | Growth from Today |
|---|---|---|
| 2028 | — | — |
| 2030 | — | — |
| 2035 | — | — |
| 2040 | — | — |
| 2050 | — | — |
Based on Rainbow Chart model (~25% annualized growth). Not financial advice.
What Is the Bitcoin Rainbow Chart?
The Bitcoin Rainbow Chart was created by Bitcoin community member Über Holger in 2014. It takes a logarithmic regression curve fitted to Bitcoin's entire price history and overlays it with 9 colored bands — each representing a different market sentiment zone. The result is an intuitive visual tool that helps investors understand where Bitcoin's current price sits relative to its long-term growth trend.
The genius of the Rainbow Chart is its simplicity. You don't need to understand logarithmic regression or mathematical models — just look at the color. Blue and green zones suggest the price is below its fair value trend, making it a good time to accumulate. Yellow and orange suggest caution, and red warns of potential bubble territory.
Importantly, the Rainbow Chart has adapted remarkably well over its decade of existence. Despite multiple bear markets, crashes, and boom cycles, Bitcoin's price has consistently stayed within the rainbow bands. The bands themselves gradually widen over time, reflecting Bitcoin's natural increasing volatility as its market cap grows.
How to Read the Rainbow Chart
Blue & Green = Accumulation Zone
When Bitcoin's price sits in the lower bands ("Basically a Fire Sale", "BUY!", "Accumulate", "Still Cheap"), the price is below its long-term logarithmic trend. Historically, these have been the best buying opportunities for long-term holders.
Yellow & Green = Fair Value
The middle bands ("HODL!", "Is This a Bubble?") represent the trend line itself. Bitcoin spends most of its time in these zones. They indicate that the price is roughly where the model expects it to be — neither undervalued nor overvalued.
Orange & Red = Overheated
The upper bands ("FOMO Intensifies", "Sell. Seriously, Sell!", "Maximum Bubble Territory") signal that Bitcoin may be overvalued relative to its trend. These have historically coincided with cycle tops, though the exact timing of reversals is unpredictable.
DCA Strategy Application
Many investors use the Rainbow Chart to adjust their DCA strategy — investing more when prices are in lower bands and reducing or pausing when in upper bands. This "Rainbow DCA" approach has historically outperformed flat DCA by buying more at lower valuations.
Rainbow Chart vs Other Models
| Model | Basis | Annual Growth | 2030 Projection |
|---|---|---|---|
| Rainbow Chart | Logarithmic regression | ~25% | — |
| Power Law | Log-log time regression | ~35% | — |
| Stock-to-Flow | Scarcity ratio | ~40% | — |
| Conservative | Diminishing returns | ~20% | — |
Compare all models side by side in our model comparison tool.
Frequently Asked Questions
What is the Bitcoin Rainbow Chart?
The Bitcoin Rainbow Chart is a visual tool created by Über Holger (also known as 'Rohmeo de la Musique') that overlays a logarithmic regression curve on Bitcoin's price history, divided into colored bands. Each band represents a market sentiment zone — from deep blue ('Basically a Fire Sale') at the bottom to dark red ('Maximum Bubble Territory') at the top. The chart helps long-term investors gauge whether Bitcoin is currently undervalued, fairly valued, or overvalued relative to its historical logarithmic growth trend.
How does the Rainbow Chart calculator work?
Our calculator uses the Rainbow Chart's underlying logarithmic regression model with an annualized growth rate of approximately 25%. It projects Bitcoin's fair value (the middle 'HODL' band) forward in time and shows price projections for future years. The actual Rainbow Chart has 9 colored bands above and below this central value, indicating different levels of over/undervaluation.
Is the Bitcoin Rainbow Chart accurate?
The Rainbow Chart has been remarkably consistent since its creation. Bitcoin's price has never permanently left the rainbow bands — even during the deepest bear markets, the price has stayed within or above the lower bands. However, the model is meant as a long-term perspective tool, not a precise price predictor. The creator explicitly states it is 'not investment advice' and should be used alongside other analyses.
What Rainbow Chart band is Bitcoin in right now?
The current band depends on where Bitcoin's price sits relative to the logarithmic regression curve. You can check this by comparing the current price to the calculated fair value bands shown on this page. Historically, the best buying opportunities have occurred in the blue and green bands, while the orange and red bands have signaled market tops.
Should I buy Bitcoin based on the Rainbow Chart?
The Rainbow Chart is a useful tool for timing DCA (Dollar Cost Averaging) strategies — increasing purchases when the price is in the lower bands and reducing them in the upper bands. However, it should not be your only decision-making tool. Combine it with fundamental analysis, your personal financial situation, and other prediction models like Power Law and Stock-to-Flow for a well-rounded investment approach.
How is the Rainbow Chart different from Power Law?
Both models use logarithmic regression, but they differ in approach. The Rainbow Chart focuses on visual simplicity — color-coded bands that anyone can understand — with a more moderate ~25% annualized growth rate. The Power Law model (by Giovanni Santostasi) is more mathematically rigorous with a ~35% growth rate and uses a log-log regression. The Rainbow Chart is better for quick sentiment checks, while the Power Law provides more precise long-term projections.
Related Resources
Power Law Calculator
Time-based Bitcoin price model
Stock-to-Flow Calculator
Bitcoin scarcity-based price model
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Rainbow Chart Deep Dive
Full article on the Rainbow Chart model
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