Bitcoin Forum

While we've seen other models more or less break, or become irrelevant, such as Stock to Flow (https://www.lookintobitcoin.com/charts/stock-to-flow-model/) and Logarithmic Growth Curve (https://www.lookintobitcoin.com/charts/bitcoin-logarithmic-growth-curve/), but do you think the Bitcoin Rainbow chart (https://www.blockchaincenter.net/en/bitcoin-rainbow-chart/) is still accurate?

https://talkimg.com/images/2023/09/10/mLqGC.png

Although based on a logarithmic growth curve, it does appear to be more accurate than the alternative log growth that effectively became invalidated in March 2020 (despite price recovering afterwards). Currently the model suggests that price is "basically a fire sale" around $20K, with current bubble territory @ $240K and a maximum low of $41K by the next halving in 2024.

It otherwise consider <$37K as accumulation territory and $50K as still cheap, which feels a bit ironic at current prices. What are your thoughts?

I am doing my best JJG.

I  DCA weekly at  this time.

I consider any price under $22,222.22 as weekly dca territory

I think we'll see movements inversely proportional to bitcoin's inflation but I don't think any model is going to be very accurate on predicting bitcoin's price for a while.

Waiting for one to be invalidated is going to be a bit problematic too - but the pattern of when inflation reduces, price increases has always held and has more reason to be held.

The rainbow chart looks a lot more flexible too with bitcoin's price though (like how it's fallen out of the bottom of the rainbow before so an event like that would be noteworthy but not the end of the model).

This kind of chart is one of the many reasons why the current price level of Bitcoin is a good buy, if you also take a look at the Fear and Greed index, it is still showing that good to buy too.
To be honest, there are still a lot of people who are afraid and we can't blame them. Even though we will say that it's in the sale, we cannot do something.

How is it now?
Just like you, I tried DCAing when the price bounced at $29000 but eventually its dipping this this low.  I would be very careful this time not to waste my stablecoin. In the last bear market, the price of BTC dips at about -80% which it may also be possible this time which could be $10000.

$20000 sure its fire sale. Anything beyond that is more than black friday sale.

No chart, price model, or price in general can dictate if bitcoin has topped, bottomed, or any other sort of "signal". We can use such chart as information on how high or how low bitcoin went, but I don't think we should be making decisions solely based on it.

Yes it’s a fire sale pretty much until the next fire sale. Many said it was a fire sale at $60k,$50k,$40k,$30k. And now we are at $20K.

Might even be a fire sale at $15k and it’ll head lower. Now is a bad time to make that assumption. Summers are chop for many markets and now we are only interested in the CPI data. If rate hikes are working or not. If we see some deflation for a few months then bottom is in. If we see 1.5% inflation then markets will tank again.

When the chart is "accurate" if the price stays between 18k and 323k, it's like betting that in a basketball match there will be between 30 and 500 points...
Besides, despite the logarithmic values going it such margins it has already failed twice, so it can do so tomorrow, it's just a drawing, if everything in the world could be predicted as such we wouldn't have "speculation".


There are quite a few waiting for the 15k, that might be the last fire sale as if we go below is going to be a blood sell.
Already all the charts all the never below ATH, never done that and this and that has been broken in this bear market, but if we go that deep it's going to be painful, really really painful.

Actually they're not stop at this situation, but they're want to make same 4 year cycle like you mentioned above, they're think that Bitcoin price will make new ATH on 2025 if they're stick with the 4 year cycle. Since this year is supposed to be the bottom, they're converting their Bitcoin to stable coin and waiting until the bottom. At that times they will hold until 2025 and sold it.

The anxiety is because of so many experts or speculators that predict Bitcoin price will goes below $10K, $1K and so on, they're investing because of people prediction lol.

If I talk about the long-term plan for Bitcoin, I will say yes, it's basically a fire sale.
But If I look at the current economy and situation in which we are, I would say there is yet a bottom to be priced in.

I would say the End of this year or in November, should be the bottom and then we can expect the price to be called actual bottom.

I don't know if calling it a fire comes out but I certainly see it as cheap. Now, I quite agree with stompix, predictive models are fine for speculation, but not for prediction. We have seen some very sophisticated ones fail.

And in that even if the price is cheap, if panic sets in again, we can go much lower.

Celsius' liquidation price is about $14k, and getting there would be a disaster but I don't rule out that they may bring in more collateral as they already did to lower the liquidation price.

In any case, I think if we go down to $15k or whatever, we won't last long at sub $20k levels.

Fire sale getting more fuel right now it seems. Bleh.


Yeah, hate to say it but I'm definitely looking at the next two rate hikes (one coming in 3 weeks and then another in September). CPI data in between also largely expected to be bad news, so pricing in will happen regardless of the outcomes -- and it'd be naive to expect anything other than what everyone's hinting at already.

So it'll be some more battering running up to Q4 before we can hope for signs of turnaround to the global economy. That's really not going to get fixed for a while.

Companies now liquidating crypto to hang on to cash for the time being, and not that we should all follow, but at the very least to keep DCA on autopilot.

As far as I can tell the rainbow model hasn't failed yet, as it factors in the regression from the lows as opposed to the highs. It's only left this model to the upside as opposed to the downside basically.


I think you'll find your first line invalidates your second. As you said the model could fail tomorrow, so surely it's still speculation to be relying on this model when it could still fail ?
This is why Bitcoin's bottom can not be predicted, because it depends on speculating using these models and others... hoping they won't fail. RIP stock to flow.

No idea just accumulating

Doesnt matter if its the bottom or not but i do consider on accumulating as much as i could even though the price might be going even further on next days or weeks or months
and as long i dont sell even i bought on higher prices then it wont be considered to be losses thats why accumulating is best on these particular times.

Im amazed with that rainbow chart in speaking on price history of Bitcoin which is typically on point if we do speak or basing up with technicals
which do really somewhat gives out some idea on where we do heading up.

that means from your estimate and validation Bitcoin still have more bottom line to go, you made a point of November that from what you understand bitcoin can start making a positive move from November and that should be the end point of the bottom. Even out that particular point you mentioned I don't think that bitcoin can resurrect from that time. If bitcoin are to be corrected in the market our expectation should be waiting until the end of the year because the bottom or Bitcoin is not something that we can conclude this time for bottom value because it seems that bitcoin will fall again to 12k before it will conclude falling

And here you go again, defending a chart that was created as a joke.
Look at it, look at the lines, see the lines outside the chart, it means it has failed.

If my mechanic tells me that my bike will blow at 10k RPM and I'm doing trip after trip pushing it to 14k, it means I have to change my mechanic not my bike.


I don't see how you could have come to that conclusion
1) In the first line I'm telling you the chart was a joke and obviously it will fail
2) In the second line I'm telling you that if somebody would find a way to perfectly predict the price there will be no more speculation as we would know for sure
How is that contradiction?


Willing to bet that will not stop you from drawing more charts and hope to get at least one right  :D

I doubt it was created as a joke. Care to reference that? I'd be curious to see the creator (https://bitcointalk.org/index.php?topic=831547.0)'s reasoning for that.


Yes I see them, the upper band was badly aligned that much is certain. I can see how a more regressive upper band could easily connect the three peaks, which would factor in reduced volatility as well. Even with two peaks that most recent peak could have been much better anticipated. Given that was created in late 2014 though, and price exceeded the upper band in late 2013, it didn't fail anyone...

But this isn't relevant to the lower band that's still in tact (and what I'm referring to).


Strange analogy but I'll roll with it, as you could otherwise just change your mindset and not take everything so simplistically from a so-called expert. If your mechanic says your bike will blow @ X, what they really mean is it can blow @ X, as it's unlikely they definitively know what would happen. They probably have a duty to warn you about the potential risk of doing so as well, as could be very dangerous to push a bike beyond it's limits. Imagine if they didn't warn you? How would they feel if you ended up in hospital over it? Maybe they just want to sell you a more expensive bike. But really, the mechanic oversimplified the situation. Did he say it will blow immediately? Of course not. Would you be damaging your bike if it's only guaranteeing 10k RPM? It's possible.

Should you take this one mechanics opinion as truth? Of course not. You could take a second opinion, someone else with more experience might tell you it'll be fine, but would wear your bike out sooner. Then you can make a better informed decision on whether you want to take the risk of wearing out your bike much quicker (if that is indeed the case), or get a bike that can guarantee 14k RPM.

I have no idea what this has to do with Bitcoin's rainbow chart though  :D


Probably because so far this chart has accurately predicted the bottoms (since it's creation), but it obviously doesn't mean it will continue to do so; hence it's always been speculative. Any model, despite how accurate it's been over the years or decades, can always fail at any time. Predictions, by definition, are never guarantees, so it'd still be speculation despite it's accuracy.

In summary, the contradiction comes from fundamentally not recognising that correct predictions are still based on speculation.

For now I don't think that bitcoin will finish just because of a correction, it's really confusing if we enter this space with such a narrow understanding and that's why I personally don't follow stupid observations that only make references on the basis of corrections.

The annual cycle that occurs with bitcoin, should be a reference, that market conditions react accordingly, if our analytical skills exceed that, then it is certain that the final decision will be quite profitable, hopefully we are in that position

It's exactly below the image you quoted in the first post, Trolololo never played with rainbows.


Which means it failed! Simple as that, no need for three lines of nothing. It failed!


Nope.
Quite funny, you're taking over my scenario and you have the nerve to say the mechanic said: "can"?
No, I have him recorded on tape he said "it will", and he was damn sure like everyone here was damn sure this and that won't happen because...charts.
When you discuss somebody's analogy you stick to it, you don't put can, might, probably, or any other value where there is none, as it stops becoming my analogy and it starts being your own.


Your point, other than circling around and not waiting to admit I was right, is?  ;D

It merely says (as a disclaimer):


No reference of it being a joke? Of course it's fun, it's intended as entertainment (not financial advise). Saves getting sued if it breaks in the wrong direction.
I see what you mean though that Trolololo created the logarithmic regression, rather than the colour bands aka rainbow chart. Fair point.

---

You're clearly ignoring the fact it was created in/after 2014: after 2013 when price left the upper band. It couldn't have failed as it never existed back then  ???

It was created with this inaccuracy, while the lower bands have remained accurate since then and until now at least. Even the upper bands weren't wrong in 2021, it merely suggested that price wasn't in maximum bubble territory, only reaching a FOMO stage, which many people agree with ironically. Crying failed when it hasn't weakens your argument that it will fail imo, even though it probably will.


Nice try, no cigar. Have replaced my quote back in it for you to read properly. I clearly said what they mean, not what they said, which are two completely different concepts.
At least stick to the facts...


So the point you're making is you can't take charts with statistical projections for outright facts or guarantees? congratulations on such a discovery, this is the entire point of charts. So if your mechanic knew better, he should have said your bike would properly blow, because the probability based on statistical data means that should probably happen. Does it mean it would happen? Of course not. Even with a 99% chance it obviously doesn't mean it would happen...

Maybe a better understanding of what statistical projections implies would be better, for yourself as well as the mechanic, so as to avoid confusion ? Ultimately, if he was referencing charts to argue his point, it should have been obvious (to both you and the mechanic) that there was an element of probability involved, even if there had been rigorous testing etc. You can never take statistical projections as facts, obviously.

Something can be right 100 times, even a billion times, and can still be wrong eventually. It simply comes down to the probability of it becoming wrong, whether that be 1% or 0.000001% chance.

you are right. So many of this chart bitcoiner present here, some times they miss interpret some certain chart. Actually mainly chart they do represent is directly or basically relate with your expectations in quote. It made me not to compromise to certain chart or concur on them because of wrong interpretation. It's misconception between price analyze who normally comes to conclusion on what is tactically sure.

That's the main thing we are trying to make people understand about it.
In this bear market, many people are fearing, and becoming panic. For this they are selling their Bitcoins in such a low price.
They need to understand the fact that Bitcoins will eventually grow, but it will take time.
Due to the production of Bitcoins are limited, it will become rare as the time passes and hence it will be very valuable.
So we can consider this time period as a fire and flash sale. In this period we need to buy as much Bitcoins as we can.
Hope everyone understands the situation and acts accordingly.

The StF model have failed back in 2020, due to legitimation of bitcoin, a process which started in 2017.
Legitimation is a process in which something disruptive to the financial status quo is turned into a Wall Street asset, being subjected to paper speculation (eg, ETFs).
Many maximalists asked for legitimation years ago, arguing this would bring "adoption" to crypto. It did bring adoption, but by the wrong people, the very people bitcoin wanted to get away from.
Moving goal posts forward will not work for the StF model. It was doomed after the covid dip. Currently the price is at the mercy of the global financial markets. If bitcoin was not legitimate, price would be above 50k. Since it is, price is going to 5k.

I rather buy, then price dips; than I didn't buy and price starts soaring. I will keep hitting myself for missing an opportunity. Once I buy I know there's no way I'm going to sell in loss. That's the kind of mindset I've come to develop about Bitcoin. It hasn't disappointed in that regard.

---

These paper hands will soon understand how unwise the decision they're taking now by selling off in panic are like others before them. They too will definitely learn.

The current market certainly shows good reasons to buy, and with bitcoin pricing which is very low and affordable, which is indeed on a sale creates great opportunities for everyone to maximize their purchase with bitcoin. Lot of investors have finally enter the market and eventually buy the whole bitcoin, while others are still in fears and panic that made them miss another chance to invest in the market and fail to purchase a lot of bitcoin.

Cautious buy at present seems quite fair.   Today wider markets have been very negative, I think possibly they do recover over this week before we later find their resolved direction but in context of that mass sale BTC has done very well.   
https://talkimg.com/images/2023/06/12/AsZrq.png

Charts should be as simple as possible is my take, it relates to consensus and quite simply we have a series of higher lows here [put a ruler on the bottom prices].   Its only short term and can be wiped out but a rally is fair game.   Above blue line or weekly average I think BTC can develop some positivity.   It would be nice to see BTC outshine every other asset this week at least tbh

While I agree there are higher lows formed in the short-term, there are also lower highs formed (both short-term and long-term, no ruler needed). So while I do appreciate simplistic technical analysis as being one of the purest forms of trend analysis, it would be over-simplifying to say there are higher lows without referencing the lower highs. In this basic sense, between $19K and $21K, price remains neutral nothing else.

Again sticking with the simplistic TA, price remains in a 6 month long downtrend with lower highs and lower lows, despite the possibility for a relief rally to the upside within a longer-term bear market.


Since $20K, a rally has always been fair game imo. The only question is when, and if if not soon then at what price.

I've already run several math and science models and this is the most likely future:

https://i.imgur.com/Vi0keEl.jpg

I consider the current price a fire sale. But there's no assurance that the Bitcoin rainbow chart will remain accurate. As with the rest of the patterns, they're all accurate until they're proven otherwise. There have been precedents of Bitcoin patterns being relevant for some time only to end up wrong at some point, S2F being probably the most popular among them. So not relying too much on those patterns now but I still consider purchases under $20,000 a good decision.

I also thought recently that there was a sale going on and a good opportunity to buy cheap bitcoin. But now I'm beginning to doubt that because there are global financial changes happening in the world that didn't exist before. It seems to me that this time the fall might surprise absolutely everyone and that the crash of 2020 might be repeated. But so far the history of bitcoin has not shown such a fall, so everyone is using the usual patterns.

Atleast provide the math dude.  ;D

Kidding aside, That Bitcoin Rainbow is obviously not realistic at all and just form through the imaginative mind of Bitcoin maximalist and shillers on social media which is in deep stress right now. The insane prediction above 100K is not realistic and healthy at all for Bitcoin because it means that everyone is holding at that time before Bitcoin moves at that price direction, Just like a bubble that waiting to be pop. I will not believe it unless billionaires start to invest on it just like what Elon Musk did or Blackrock.

Well ETFs are opening up, Europe just got one, Canada has one, USA is sueing the SEC to get one...
These tools are needed for Wallstreet money to enter the space.

Bitcoin isn't a bubble, the 19999 shitcoins probably are but Bitcoin is most likely here to stay.

It is because of this that trading is not only a science but an art, we cannot just take a look at the numbers and then take a decisions based on them, and while this is better than what the majority of the traders do, those which are the best also try to consider other factors when taking their investment or trading decisions, the chart presented is an useful one but I think there is still potential for the price of bitcoin to go lower, however the current price is a good starting point for a DCA strategy.

I'm not sure I'd say it's a fire sale.  This is the level that seemed obvious we would fall to when looking at a chart of the price.  I think a fire sale would be a price under $10K.  Not saying now isn't a good time to be buying...  I'm sure we're close to the bottom.  Like pretty much everyone else I'm seeing $13K as a likely bottom, but I'm also seeing a rise to new highs once that is behind us and things like the gox coins aren't hanging over the market.  So don't go mortgaging the house Saylor style to buy BTC just yet, but do go ahead and start growing your stack and getting your plan in place going forward.

That "art" part is a bit wobbly though, and that's kind of the trouble. The science part is about the data, and you could make calculations based on that and it wouldn't be too hard. But, the part where it is art becomes a bit harder and harder every year. This is why I feel like it's not going to be that easy to convince people to stop what they are doing with the data part, and start focusing on the art part as well.

I personally do a long term investment and I have no headaches because of it. However, when I trade, which is a small time thing for me, I still focus solely on the data and yes sometimes I am wrong but that is worth it, much better than just winging it.

To state the BTC price stays higher pricing for a period of 9 years and we last until 2025 trading every day as we have previous is actually still bullish, exceptional optimism for a doom and gloomer.   But then it goes to zero so be scared, eventually the sun explodes and Yellowstone volcano is due any day yet we continue.   If BTC is fine till 2025 I think thats alot more bullish then the worst case scenario, you are lacking imagination of all possible events.   Just a simple EMP event would be enough, totally natural and many other situations BTC is surely challenged (worse then now).
   The main question is why 2025, dollar has accumulated value in 2025 despite its debt and deficits, lagging inflation for 3 years yet appreciates anyway.  Perhaps maybe they default on bonds but respect paper doesnt make sense but a possible scenario and I can see BTC does tank with that deflationary event.
  The trajectory for the future is most likely similar to the past with ever increasing volatility.

There is no doubt its a firesale right now. Get as much of it as you can, thsi si going to be like getting the collection item of a great product, in a pawn shop that doesn't know what they are dealing with. Get it now, at this price, when it is basically low enough to say that it shouldn't be, and when the price recovers which we all know it will, you will be able to make a ton of profit from it. All the people who buy from here, will be able to say that they did a great job and count their profits, all the people who sold now and call it a dead thing, will regret it in a year or two and wish that they bought it.

I would say every dip is a fire sale, but don't make investment based on those charts or assumptions. You can never predict what is going to happen next. So don't go all in hoping that the exact same thing will happen. You might end up losing everything. Instead invest whatever you can afford to lose. If you don't have any spare money lying around, then don't invest. Just keep holding whatever you invested. You don't lose anything as long as you don't sell.

People assumed the price will reach 100k last year based on trends and charts. That didn't happen, did it?

I believe that we are still following the same upward trend as before that this is still a "fire sale" considering how much below the bitcoin intrinsic value we currently are.

The problem is that there are always external factors that affect the market and can push this trend out of its natural course like the 2020 COVID pandemic and its effects on the global economy or the current ongoing conflict between East and West that had a significant effect mostly on Western economy and partly in Eastern economy.

Add to that all the market manipulation, panic sells, FUD, ... and you should start seeing the market more clearly.

This could be the last chance to see it at its current price. For me this is really the best time to buy bitcoin because next bottom of market cycles would be much higher if we are going to base bitcoin's historical corrections. We are just in early phase of this bear market so we have a lot of time to accumulate until the next cycle.

I'm preparing for the price to go deeper at this point because everyone is thinking this is not the bottom yet considering also the global crisis that we experience now.

Well, I hope so but honestly, I wasn't already convinced with the current pumps it showed as this bear season will stay longer just like in the last bear market, and more often it pumps during weekends and drops again.

I will still be going to grab more Bitcoin if ever it drops below $18k. I already learn my mistakes in the last Bullrun and certainly, I can't afford to lose this opportunity again. But if you are right, well, I have nothing to regret as I was already held some ready for the big run.

Well I am not really saying that people should disregard the science part of it, in fact I would say it should be the majority of their trading system, however there is a small percentage of your strategy that should be left at your discretion, this means that you will have to take the whole picture into account and not just the most the recent data to take your decision, which is why even if the price is attractive right now in my personal opinion we are still bound to see even lower prices during the next months, so it is a good idea to keep some spare money so you can buy bitcoin when that happens.

Fire sale suggests a rushed temporary situation where as BTC can test patience far more then that.   We can be here for weeks, drift lower some spike down and really scare people enough to shake them out of the tree and so on.    Ultimately I think its better to be bullish now then the failed hopes of 100k where people failed to realize aspirations would be dashed on the rocks because markets stall on such weak flimsy reasoning as higher price hopes.
  The reason it would be better value and so a good sale opportunity to buy is BTC does have a better backbone to it then purely guessing a higher price, so many bears think thats all BTC is and people go and confirm that for them while calling themselves bulls.

It doesn't have to be temporary for it to be a fire sale. For example when price was $200 back in 2015, it stayed there for a long time and we even had a big drop down to $150 (-25%) but I don't think you can find anybody who wouldn't call $200 a fire sale!
It was repeated at $3000 and now it is repeating at $20000 ;)

Investing in bitcoin is like holding a fire, whenever there is a risk of loss, but because the opportunities for profit are high, I don't hesitate to take risks, hopefully the price will skyrocket again and allow me to do many things.