BITCOIN LOGARITHMIC REGRESSION RAINBOW

Chart shows Bitcoin's price overlaid with the logarithmic regression rainbow lines


What is the Bitcoin Logarithmic Rainbow Chart?

  • This chart shows Bitcoin’s price overlaid with the logarithmic regression rainbow lines. 
  • The logarithmic regression lines are based on the formula y = 10^(a * ln(x) – b), where x is the time in days with some offset and a and b are constants which are found by fitting to the data for the primary log line only including prices at ‘non bubble prices’.

How to use the Bitcoin Logarithmic Rainbow Chart

  • The rainbow can also be used for identifying accumulation zones. For example, accumulating Bitcoin when the price in bands 1, 2 & 3 have been good accumulation periods for the next market cycle.
  • Similarly, it can be used to identify market peaks and when is best to sell during a cycle.
  • For Bitcoin, the first market cycle peaked above the red band 10.
  • The second market cycle peaked around band 10.
  • The third market cycle peaked at band 8.
  • If this trend continues we might expect that the next market cycle peak may occur near band 6 or 7.