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‘Bitcoin Rainbow’ chart marks $16.7k as bottom, hints at a pot of gold in most bullish scenario

'Bitcoin Rainbow' chart marks $16.7k as bottom, hints at a pot of gold in most bullish scenario

As the cryptocurrency market flashes red again, losing $165 billion in a week and dropping to its lowest levels in two months, and Bitcoin (BTC) drops below $19,000, investors and traders are looking for any kind of input on what awaits the largest token in the future.

To help them gauge the price of the maiden digital asset, some of them turn to Bitcoincenter’s rainbow price chart, introduced by Bitcointalk user ‘trolololo’ in 2014, that shows its past performance to provide a potential insight into its long-term movements.

In its short-term predictions, the rainbow chart indicates $16,703.48 as the bottom (‘1BTC = 1BTC’) in its purple band for September 22. At the same time, the end-of-the-year prognosis suggests that its most bullish scenario (‘Maximum Bubble Territory’), marked by dark red color, could see Bitcoin reach $294,915.68 on January 1, 2023.

Bitcoin rainbow price chart. Source: Blockchaincenter

As for the short-term middle-way ‘HODL!’ scenario, marked in yellow, it is predicted to stand at $76,160 on September 23, 2022, whereas for the year’s turn, the rainbow price chart indicates Bitcoin could be in the zone around $86,790.

‘Just for fun’

It is important to note that the color bands only follow a logarithmic regression but do not represent any scientific basis. As the chart’s creators warn:

“The Rainbow Chart is not investment advice! Past performance is not an indication of future results. The Rainbow Chart is meant to be a fun way of looking at long-term price movements, disregarding the daily volatility ‘noise’. (…) In other words: It will only be correct until one day it isn’t anymore.”

As things stand, Bitcoin is currently trading at $18,451, down 7.33% on the day, as well as 16.8% compared to the previous seven days. 

Bitcoin 7-day price chart. Source: CoinMarketCap

Meanwhile, the market capitalization of the largest cryptocurrency, by this indicator, stands at $352.96 billion at press time, as per CoinMarketCap data.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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