The Rainbow Chart did it again: We dipped below the "Basically a Fire Sale" level and bounced hard

The Bitcoin Rainbow Price Chart is one of the most famous charts in all of crypto, that was made in 2014 and despite popular belief has not been adjusted since then. The Rainbow Chart started as a meme in response to PlanB's S2F model. While PlanB's S2F model has clearly failed -and in my view never had any predictive validity to begin with due to its huge standard deviations- the Rainbow Chart has done an impressive job at identifying good moments to sell and good moments to buy. It is particularly good for identifying great moments to buy, as the dark blue level of "Basically a Fire Sale" has always provided us with the best opportunities for buying.

After dipping below the Basically a Fire Sale level once in March 2020, we just did it again. Similar to in 2020, we immediately bounced back up. See the following charts:

The Bitcoin Rainbow Price Chart

A zoomed in perspective on the Bitcoin Rainbow Price Chart

Hence, the ridiculed meme chart did it again. It is pretty crazy to think that all one had to do over the past years was follow the rainbow chart, and that despite all the macro issues and uncertainty in this world we are still finding support on the bottom of this rainbow. Is this just a fluke or should we attribute meaning to this development? Do you expect this model to fail?

Lastly, want to know something even more crazy? Even the ETH rainbow price chart identified the bottom very well this year. ETH already bounced to the next level of Undervalued.

Etherum Rainbow Price Chart