The price of Bitcoin (BTC) has skyrocketed since last week, reaching prices not seen since early December 2021. The price has almost doubled in the last 4 months, but according to the famous “Rainbow Chart” it could still be considered cheap. In this article we take a look at this popular model.
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Bitcoin rainbow chart
Bitcoin last week revived its massive uptrend from the final quarter of last year. In a week and a half, the Bitcoin price has risen by more than 20 percent and is “only” 30 percent away from its record high of $69,000. Yesterday, Bitcoin reached almost $53,000.
Dutch crypto analyst Daan Crypto Trades divided yesterday on the social media platform
As the name suggests, the colors of the rainbow are used to indicate whether BTC is currently a good buying or selling opportunity. Cooler colors typically indicate a good time to buy, while warmer colors indicate a good time to sell.
The purpose of the chart is not to make accurate predictions, but rather to show historical trends and cycles. It can be used to get an idea of where the current price is relative to historical patterns.
BTC “still cheap”
Although the price has almost doubled in the last 4 months, the price is still in the “still cheap” range.
Historically, during each halving, the price of Bitcoin would move in the lower bands, only to rise to the upper bands in a new bull market.
After the first and second halvings, the price rose to the upper dark red band the following year. After the previous halving, Bitcoin did not cross the second highest (red) band.
If Bitcoin manages to reach the red or dark red band again sometime in the second half of 2025, this would mean prices between around $270,000 and $425,000.
However, it is important to note that past data is no guarantee of the future. Additionally, as a very young asset, Bitcoin has little history to rely on.
If BTC enters another gigantic bull market like it has in the past, the price could end up at least well above the current price of $52,000. In this context, it is important to zoom out to get a clear picture of the current state of BTC price.
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