BTC rainbow chart, weekly lines from 2016 to the present.
The core logic of this chart is to layer the price using logarithmic-scale Fibonacci extension bands. Each colored line corresponds to a specific h value—the larger the number, the more expensive the price level.
Let’s look at a few key turning points. At the end of 2018, price dropped to the red zone at h=2.382, when BTC was over three thousand dollars. In March 2020, during the pandemic crash, it was smashed down to h=2.618, around a bit over four thousand. Looking back, both of these spots were basically “money on the table.”
In the 2021 bull run, price surged to h=4.20–4.24, topping out around the high-50,000s. In the 2022 bear market, it fell back to the green zone at h=3.618—again, a major buy zone.
Currently, the price is between h=4.582 and h=4.618, on the upper side of the blue band. It’s not cheap, but it hasn’t reached the crazy zone above h=5 yet.
The biggest value of this chart is that it helps you locate which “temperature band” you’re in. h below 3 means you can feel comfortable holding/accumulating; h above 4—start paying attention to position sizing; and h above 5 is when you should be thinking about whether to trim rather than add.
The core logic of this chart is to layer the price using logarithmic-scale Fibonacci extension bands. Each colored line corresponds to a specific h value—the larger the number, the more expensive the price level.
Let’s look at a few key turning points. At the end of 2018, price dropped to the red zone at h=2.382, when BTC was over three thousand dollars. In March 2020, during the pandemic crash, it was smashed down to h=2.618, around a bit over four thousand. Looking back, both of these spots were basically “money on the table.”
In the 2021 bull run, price surged to h=4.20–4.24, topping out around the high-50,000s. In the 2022 bear market, it fell back to the green zone at h=3.618—again, a major buy zone.
Currently, the price is between h=4.582 and h=4.618, on the upper side of the blue band. It’s not cheap, but it hasn’t reached the crazy zone above h=5 yet.
The biggest value of this chart is that it helps you locate which “temperature band” you’re in. h below 3 means you can feel comfortable holding/accumulating; h above 4—start paying attention to position sizing; and h above 5 is when you should be thinking about whether to trim rather than add.