# Bitcoin Rainbow Chart Signals Fire Sale Levels

**Published:** 2026-06-12T12:18:47.304Z  
**Topic:** Bitcoin Rainbow Chart  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/3b7e2746-c8b1-4b05-9d12-724f47dbbafc

The Bitcoin Rainbow Chart, a tool born from a 2014 meme, recently signaled "Fire Sale" levels as prices dropped. Here is its history and how it works.

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

## Sources
1. Bitcoin Magazine — [Bitcoin Price Plunges Below ‘Fire Sale’ Territory as Fear Index Reads 12 — Echoing the FTX Crash](https://bitcoinmagazine.com/markets/bitcoin-price-plunges-below-fire-sale)
2. Coinglass — [Bitcoin Rainbow Price Chart Indicator, Bitcoin Logarithmic Growth Curves | CoinGlass](https://www.coinglass.com/pro/i/bitcoin-rainbow-chart)
3. Bitcoin Magazine — [Bitcoin Rainbow Chart Signals ‘Fire Sale’ Zone as BTC Enters Undervalued Territory](https://bitcoinmagazine.com/markets/bitcoin-rainbow-chart-fire-sale)
4. Blockchaincenter — [Bitcoin Rainbow Chart - Live | BlockchainCenter](https://www.blockchaincenter.net/bitcoin-rainbow-chart/)

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Cite as: TrendWatcher, "Bitcoin Rainbow Chart Signals Fire Sale Levels", https://www.trendwatcher.in/article/3b7e2746-c8b1-4b05-9d12-724f47dbbafc