Why Bitcoin is still cheap according to this model

The price of Bitcoin (BTC) has risen significantly since last week, reaching prices not seen since early December 2021. The price has almost doubled over the past four months, but according to the popular “rainbow chart,” it can still be considered cheap. In this article we take a look at this popular model.

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Bitcoin rainbow chart

Bitcoin last week revived its massive uptrend from the last quarter of last year. In the space of a week and a half, Bitcoin's price has risen more than 20%, putting it just 30% away from its record high of $69,000. Yesterday, Bitcoin reached nearly $53,000.

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As the name suggests, rainbow colors are used to indicate whether Bitcoin is currently offering a good buying or selling opportunity. Cool colors usually indicate a good time to buy, while warm colors usually indicate a good time to sell.

The purpose of a chart is not to provide accurate predictions, but rather to chart historical trends and cycles. It can be used to get an idea of ​​where the current price is relative to historical patterns.

BTC “Still Cheap”

Despite the fact that the price has almost doubled over the past four months, the price is still in the “still cheap” zone.

Historically, Bitcoin's price has been in the lower ranges whenever a halving occurs, only to rise to the upper ranges in a new bull market.

After the first and second halves, the price rose to the upper dark red band in the following year. After the previous halving, Bitcoin did not exceed the second highest range (red).

If Bitcoin can reach the red or dark red range again sometime in the second half of 2025, this would mean prices in the range of approximately $270-425,000.

However, it is important to note that past data does not guarantee the future. Furthermore, as a very young asset, Bitcoin has no reliable history.

If, as in the past, BTC enters another giant bull market, the price could at least end well above the current price of $52,000. In this regard, it is important to zoom out to get a clear picture of the current situation of the BTC price.

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