We are about to go below the “Basically a Fire Sale” level on the Rainbow Price Chart
2 min read
The Rainbow Price Chart is one of the most famous charts in crypto. It uses a simple logarithmic growth curve to forecast the potential future price direction of Bitcoin. It was made in 2014. The chart looks like this:
Although it is clearly stated that this chart is just for educational and entertainment purposes and does not provide any financial advice -which I would wholeheartedly agree with- it is interesting that this chart has been rather accurate at identifying good moments to sell and good moments to buy. One time in 2014 we went above the chart. Now we are about to dip below it:
Dipping below the “basically a fire sale” level has only happened once before, during the March 2020 Covid crash. It was the most amazing buy opportunity and anyone who bought BTC back then is still up a lot.
Questions:
Should we attribute any meaning to this chart? It is definitely recommending us to buy, which aligns with almost all the bottom indicators flashing (e.g. Pi cycle indicator, Puell Multiple, MRV-Z score, RSI and MACD lowest ever). That said, there is no doubt that crypto has not seen a macro environment like this one before. What shall we name the level under the “this is a fire sale” level? Perhaps “Sell your family, friends, and kidney” level? Or might it be the “Crypto is dead” level?
submitted by /u/Beyonderr
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