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.