Bitcoin Rainbow Chart Signals Fire Sale Levels

Bitcoin price recently dropped into the "Basically a Fire Sale!" band on the Bitcoin Rainbow Chart, a depth not reached since the FTX exchange collapse in November 2022 [1]. This places the asset outside the historical channel that has contained its long-term price behavior, according to the model [1]. While the chart is often viewed as a meme, it overlays logarithmic growth curves with color-coded sentiment bands to visualize market valuation [1][4].

Key takeaways

• Bitcoin recently traded below the "Basically a Fire Sale!" band, a level last seen during the 2022 FTX collapse [1].
• The chart originated in 2014 as a Reddit meme created by user 'azop' and was later updated with a logarithmic regression formula [4].
• The Fear and Greed Index recently registered a reading of 12, signaling "Extreme Fear" in the market [1].
• Sources report varying price points for these signals, with one citing levels near $63,500 and another referencing the $83,000 range during a prior drawdown [1][3].

Origins of a Crypto Meme

The Bitcoin Rainbow Chart was created in 2014 by Reddit user 'azop' during the bear market following the Mt. Gox implosion [4]. It was designed as a morale-boosting tool, using a log scale to smooth out volatility and color bands to indicate if the price was "undervalued" or "overvalued" [4]. The original version used a straight line, implying infinite exponential growth, which was updated in 2019 by the BlockchainCenter owner using a logarithmic regression formula from Bitcoin Talk user 'trolololo' [4]. This formula, $y=2.9065\ln(x)-19.493$, allowed the curve to flatten over time, creating the "bow" shape seen today [4]. The creator emphasizes that the chart was never a serious attempt to predict price but rather a fun way to look at price history [4].

Recent Market Signals and Volatility

In June, Bitcoin price opened near $63,500 after sliding below $62,000, placing it beneath the chart's lowest valuation band [1]. This breach coincided with a Fear and Greed Index reading of 12, deep in "Extreme Fear" territory [1]. Strategy’s Michael Saylor argued the sell-off reflected institutional capital rotating into AI infrastructure rather than a deterioration in Bitcoin’s fundamentals [1]. Earlier, in October 2025, the chart also signaled "fire sale" levels when BTC struggled at $83,000, having shed roughly 30% of its value since early October of that year [3]. That drop triggered nearly $960 million in forced liquidations for BTC alone and occurred alongside broader market turmoil, including