If you’ve been following the cryptocurrency market, you may have come across the Bitcoin Rainbow Chart, a popular tool for spotting buying opportunities based on long-term market trends. Currently, this chart is signaling a ‘fire sale’—a rare occurrence that has investors wondering if now is the right time to buy Bitcoin (BTC).
Understanding the Bitcoin Rainbow Chart
The Bitcoin Rainbow Chart isn’t your average price indicator; it’s a color-coded chart that helps investors decipher the market’s cyclical patterns and valuation levels. Over the years, it has become a trusted resource for identifying key inflection points—times when Bitcoin is either undervalued or experiencing a peak.
Most recently, the chart highlighted Bitcoin’s $95K price point as an attractive buying zone for mid-term investors. Historically, when the chart flashed a ‘fire sale’ signal, it marked favorable entry points for long-term gains. For instance, the last such signal was spotted during H2 2024 to Q1 2025, leading to significant rebounds.
Current Market Dynamics
According to the Blockchain Center, Bitcoin’s ‘accumulate’ zone now falls around the $150K-$160K range, indicating a potential 60% upside if history repeats itself. However, Bitcoin could still drop to the $65K-$75K range, which is often referred to as a “BTC is dead” zone—a point where past bear markets often found their lows.
In the short to medium term, market dynamics are painting an optimistic picture. CryptoQuant’s analyst DarkFost revealed that selling pressure in the derivatives market has decreased significantly, with futures market volume dropping by 90%. If net selling flips to net buying, this could trigger a bullish reversal.
Spotlight on Institutional Demand
Institutional interest in Bitcoin is also making a modest comeback. Data from Glassnode shows that corporate treasuries added around 43,000 BTC per month over the last six months, totaling 260,000 BTC. Despite these inflows, mixed performance from U.S. Spot Bitcoin ETFs has limited a broader rally, with the 30-day Average Apparent BTC Demand dropping from 800K BTC in December to just 284K BTC at present.
Is Now the Time to Buy Bitcoin?
For investors, the Bitcoin Rainbow Chart suggests that the current $95K price point—or even a dip to $65K-$75K—could represent a premium buying opportunity. However, as with any high-risk investment, due diligence is essential. Market conditions remain volatile, and while trends may favor bulls in the medium term, cautious optimism is advised.
Invest Smartly
Before jumping in, consider diversifying your holdings with tools or products designed to simplify cryptocurrency trading. For example, Ledger hardware wallets offer a secure way to store your Bitcoin while maintaining control of your private keys.
As Bitcoin continues its consolidation, keeping an eye on evolving market trends and institutional demand will be crucial for making informed investment decisions.
