Bitcoin Falls Below Rainbow Chart Into 'Bitcoin Is Dead' Zone
The drop follows the record peak of $126.000 in October 2025 and is fueling debate over how relevant the model still is now that ETFs and institutional investors carry more weight.
Key Takeaways
- Bitcoin has fallen below the Rainbow Chart's lowest band for the first time and is trading around $62.500.
- The price is down about 50% from the October 2025 peak of $126.000 and has entered the 'Bitcoin is Dead' zone.
- Analysts mostly see the Rainbow Chart as a sentiment indicator, while institutional investors and ETFs are changing the market structure.
Bitcoin has fallen below the lowest band of the well-known Bitcoin Rainbow Chart for the first time in a long while, a model that has tracked Bitcoin's long-term price cycles for more than a decade. Bitcoin's price recently dropped about 50% from its October 2025 peak, when it hit a record high of $126.000 (€111.100). It is now trading around $62.500 (€55.100), which puts it below the chart's bottom band and into the so-called "Bitcoin is Dead" zone. Historically, this zone has been linked to extreme pessimism, but it is not a prediction of Bitcoin's actual fate.
What the Break Below the Rainbow Chart Means
The Rainbow Chart, created in 2014 by a Reddit user named Azop, uses logarithmic regression to map Bitcoin's long-term price trend. The chart's colored bands represent different phases of market sentiment, from undervalued to overvalued. The fact that Bitcoin has now fallen below the lowest band has led to mixed opinions among analysts. Some experts see this as a sign that the model itself may need to change as the market grows and matures. Markus Levin, co-founder of XYO, says this break does not mean Bitcoin is dead, but that the Rainbow Chart may be losing some of its predictive value as institutional investors and ETFs play a bigger role.
The Role of Institutional Investors and a Changing Market Structure
With more institutional investors getting involved and Bitcoin ETFs gaining traction, the way Bitcoin's price is set is changing. According to Ryan Lee, chief analyst at Bitget, the Rainbow Chart is still a useful visual tool for understanding long-term cycles, but it is less useful as a forecasting model because it does not account for fundamental and macroeconomic factors that have a bigger impact today. Emad Shahin of Ethra also says the chart works better as a market sentiment indicator than as a reliable predictor of price moves.
The current setup is different from earlier cycles, when Bitcoin often saw a strong price surge after a halving. Bitcoin's price is now close to the level from the April 2024 halving, which suggests the market is behaving differently than it has in the past. Mark Zalan, CEO of GoMining, says the "Bitcoin is Dead" zone mainly points to extreme fear and undervaluation, but does not mean Bitcoin is actually failing. He calls it a sentiment signal that has often been followed by a rebound in the past.
The weak price action comes alongside a broader market pullback. Another analysis had already pointed to lower liquidity and the lack of new ETF inflows, factors that could put extra pressure on the price in the short term.
What This Means for Investors and the Future of the Rainbow Chart
The debate over the Rainbow Chart's relevance is not over yet. While some analysts see the chart as outdated because of the changing market structure, others still view it as a useful reference point. The coming period will show whether Bitcoin moves back inside the chart's historical bands or whether the model needs to be adjusted to a new reality with more institutional influence and ETF flows. For European and other investors, it may be important to understand that traditional valuation models may be less accurate now and that sentiment indicators like the Rainbow Chart should be read with caution.
