Bitcoin Rainbow Chart
Logarithmic regression bands colored into nine valuation zones from 'Extreme Discount' to 'Extreme Overvaluation'. An accessible long-term perspective on where price sits relative to its historical trend.
What is it?
The Rainbow Chart overlays a logarithmic regression on Bitcoin's price with 9 colour bands representing different valuation zones. From dark blue (extreme discount) to dark red (extreme overvaluation), the bands create a visual spectrum of price's relative position in its logarithmic growth trajectory. The central curve follows log(price) = a × log(days) + b, fitted on the entire history.
How to read
Price oscillates within the bands over cycles. Lower zones (blue, green) historically correspond to accumulation, middle zones (yellow, light orange) to trend fair value, and upper zones (dark orange, red) to speculative phases. The chart is in logarithmic scale to accommodate exponential growth.
Key zones
Blue zone ('Extreme Discount'): touched only at absolute bear market troughs. Red zone ('Extreme Overvaluation'): reached only at cycle tops. The green-yellow band represents the median trend where price spends the majority of its time.
What to observe
The speed at which price traverses bands is a momentum indicator. A rapid move from green to red suggests a parabolic bubble (like late 2017). A prolonged stay in middle bands suggests slow accumulation (like 2019-2020).
Historical context
The Rainbow Chart is one of the most popularised models in the Bitcoin ecosystem, often presented playfully but fundamentally grounded in logarithmic regression. It correctly framed the 2013, 2017, and 2021 tops in red bands, and the 2015, 2018, and 2022 troughs in blue bands.
Expert notes
The logarithmic regression is periodically refitted as new data becomes available, shifting the bands. A 2017 Rainbow Chart showed different bands than a 2024 one. This retrospective refitting significantly weakens the model's predictive value. The bands are arbitrary (evenly spaced), with no theoretical justification for their width.
Common mistakes to avoid
The Rainbow Chart is a visualisation tool, not a predictive model. Treating it as 'when blue accumulate, when red distribute' ignores that bands shift with refitting and that logarithmic regression has no guarantee of continuing indefinitely. The market could one day permanently exit the corridor from below.
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/onchain/bitcoin-rainbow/history?days=90' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "bitcoin-rainbow",
"timeframe": "1y"
}Required tier: free. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
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Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.