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Bitcoin Rainbow Chart updated with new lower band after second breach

The infamous Bitcoin Rainbow Chart has been updated to include a new lower band called “1BTC = 1BTC.” The chart echoes PlanB’s stock-to-flow model in terms of sentiment, with bands indicating when to buy and sell Bitcoin.

Source: blockchaincenter.net

“The original Rainbow Chart is dead. Long live the Rainbow Chart with the new indigo color band!”

Twitter account @rohmeo_de commented that the new indigo band “was always missing.” Its inclusion now accounts for the 2020 dip, which saw the Bitcoin price breach the previous lowest band.

In November 2013, BTC breached the upper band before returning within the parameters, only for another upper breach to occur in January 2014.

However, referencing the bearish macro backdrop and invalidation of the Stock-to-Flow predictive price model, @omgbruce mocked the update, implying it was a desperate attempt to stay valid.

Lol!! 😂 rainbow 🌈 chart just updated a lower bound called 1 #btc = 1 #btc 🫣https://t.co/T1hnYlQlGK

— Bruce (@omgbruce) September 19, 2022

The Bitcoin Rainbow Chart

The Bitcoin Rainbow Chart documents the BTC price logarithmically across ten bands, denoting different stages of sentiment. The general idea is that price would move between bands and indicate possible calls to action, such as sell during a red-hot market.

As with all predictive price models, the price should not breach the upper or lower bands. Otherwise, the calculations that derive the bands’ positions must be invalid or, at the least, incomplete.

Its creators warn that the chart is not investment advice, past performance does not indicate future results, and the chart is a fun way of looking at long-term price movements.

Before the addition of the new lowest, “1BTC = 1BTC” band, “Basically a Fire Sale” was the previous lowest band.

September 19 sees Bitcoin dip into the new “1BTC = 1BTC” band amid a weekend sell-off that has continued into Monday. At 08:00 UTC, bulls stepped in at $18,200 to stop the slide, sending BTC to $18,800.

Since then, there have been two further retests of $18,800 resistance, with bulls so…

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