# Bitcoin Rainbow Chart Tool Open-Sourced on GitHub

**Published:** 2026-06-12T12:18:47.304Z  
**Topic:** Bitcoin Rainbow Chart  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/e05967c9-3943-4f69-8a44-fe204d483364

A developer has released a Python script to generate the Bitcoin Rainbow Chart, a logarithmic valuation tool currently signaling "fire sale" prices.

A developer has released a Python script on GitHub that allows users to generate the popular Bitcoin Rainbow Chart, a logarithmic valuation tool used to assess market sentiment [3][4]. The open-source project arrives as Bitcoin’s price has recently plunged into the chart’s lower bands, historically labeled as "fire sale" territory [1].

**Key takeaways**
*   StephanAkkerman published a Python script to generate the Bitcoin Rainbow Chart using data from Nasdaq and Binance [3].
*   The chart uses logarithmic regression and colored bands to indicate if Bitcoin is overbought, fairly valued, or oversold [1][5].
*   Current market data places Bitcoin in the "fire sale" zone, with the price struggling around the $83,000 level [1].
*   The tool warns that historical patterns do not guarantee future price movements [5].

## How the open-source tool works
The script, created by user StephanAkkerman, utilizes the matplotlib library to visualize Bitcoin’s price trajectory using the rainbow chart method [3]. It fetches historical data from Nasdaq’s Data Link, chosen for having the oldest available records, while using Binance’s API to retrieve the most recent data, as Nasdaq’s information only extends to the beginning of 2024 [3]. The developer referenced the version found on CoinGlass and drew inspiration from a Medium post by coinmonks to construct the code [3][4]. The resulting output displays vertical lines to represent Bitcoin halving events [3].

## Interpreting the rainbow bands
The Rainbow Chart is designed as a long-term valuation tool that overlays rainbow color bands onto a logarithmic growth curve to forecast potential price direction [5]. Warmer colors at the top of the chart historically signal that the market is overheated, suggesting potential profit-taking opportunities, while cooler colors indicate depressed sentiment and accumulation zones [5]. Despite its popularity, the chart's creators note that while it captures historical long-term price movements, it does not guarantee Bitcoin will continue to follow the same channel in the future [5]. Currently, the indicator suggests Bitcoin is deeply undervalued, with the asset trading in the "fire sale" band after dropping roughly 30% since early October 2025 [1].

## Why it matters
This tool provides traders and analysts with a method to visualize long-term market cycles and potential price extremes [5]. As Bitcoin recently fell below its 100-week moving average and triggered nearly $1 billion in liquidations, the chart offers a historical context for the current downturn [1]. The release of the script allows independent verification of the chart's methodology, which many investors watch to see if Bitcoin continues to adhere to historical trends during new market cycles [5].

## Sources
1. Bitcoin Magazine — [Bitcoin Rainbow Chart Signals ‘Fire Sale’ Zone as BTC Enters Undervalued Territory](https://bitcoinmagazine.com/markets/bitcoin-rainbow-chart-fire-sale)
2. Coinglass — [Bitcoin Rainbow Price Chart Indicator, Bitcoin... | CoinGlass](https://www.coinglass.com/pro/i/bitcoin-rainbow-chart)
3. Github — [Bitcoin Rainbow Price Chart - GitHub](https://github.com/StephanAkkerman/bitcoin-rainbow-chart/blob/main/README.md)
4. Github — [GitHub - StephanAkkerman/bitcoin-rainbow-chart: The popular...](https://github.com/StephanAkkerman/bitcoin-rainbow-chart)
5. Bitcoinmagazinepro — [Bitcoin Rainbow Price Chart Indicator | BM Pro](https://www.bitcoinmagazinepro.com/charts/bitcoin-rainbow-chart/)

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Cite as: TrendWatcher, "Bitcoin Rainbow Chart Tool Open-Sourced on GitHub", https://www.trendwatcher.in/article/e05967c9-3943-4f69-8a44-fe204d483364