Bitcoin Rainbow chart predicts BTC price for 2025

After reaching a new all-time high (ATH) above $106,000 on December 17, Bitcoin (BTC) saw a significant pullback. The price of the leading cryptocurrency plummeted back down to $95,000, before briefly testing the $92,000 mark and rebounding upward in early January.

BTC was changing hands at roughly $98,850 at the time of publication — compared to the equivalent period in 2024, prices are up 125.25% and have increased by 5.18% since the start of 2025.

While analysts are generally bullish and expect Bitcoin to resume its upward trajectory, exactly how high it will go is still a matter of debate — and predictions vary quite a bit.

Taking a look at the Bitcoin Rainbow chart can offer additional insights — and that’s exactly what one cryptocurrency expert did to determine in which part of the cycle we’re currently in.

Bitcoin is still in its accumulation phase

A Rainbow Chart is a tool that uses a logarithmic growth curve to describe investor sentiment depending on price levels. The chart is divided into nine color-coded zones — each of which corresponds to a certain price range and market sentiment at a given point in time.

These zones range from ‘Bitcoin is dead’ at the lowest, which indicates severe bearish sentiment, all the way up to ‘Maximum Bubble Territory’ — areas that are so high that they’re usually followed by steep corrections.

At its $98,850 price at press time, Bitcoin is firmly in the lower half of the Rainbow Chart — sitting at the intersection of the ‘BUY!’ and ‘Accumulate’ bands, according to renowned cryptocurrency researcher Michaël van de Poppe, who, in a January 5 post on social media platform X, praised the Rainbow Chart as a ‘beautiful indicator’.

The Rainbow chart for #Bitcoin is a beautiful indicator.

It tells that the previous cycle hasn’t gone into the type of euphoria that we generally witness in a Bitcoin cycle.

Due to that cycle, the expectations of this cycle have substantially lowered as PTSD kicks in.… pic.twitter.com/3meyQCLrca

— Michaël van de Poppe (@CryptoMichNL) January 5, 2025

As noted by van de Poppe, even if Bitcoin were to reach prices between $110,000 and $150,000 in short order, it would still be trading in the ‘Still Cheap’ zone. In contrast, to reach valuations that indicate overbought levels, the leading digital asset would have to rally to at least $250,000.

Analyst reflects on distorted BTC expectations

A look at the long-term rainbow chart reveals that the previous market cycle didn’t bring about the sort of euphoria and buying pressure that is typically witnessed — a fact that van de Poppe blames for the substantially lower expectations this time around, even referring to the phenomenon as PTSD.

The analyst also reflected on the fact that extreme overbought levels shift as time goes on, at least per the Rainbow Chart. The same $375,000 mark that would indicate high odds of an imminent pullback now will shift to $470,000 by August.

Finally, the researcher reiterated his long-held bullish stance — stating this market cycle will be ‘extreme’ and highly comparable to price action seen between 2014 and 2017.

Featured image via Shutterstock

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