Bitcoin Rainbow Chart Predicts 120% Gain to $200,000 by 2025

The Bitcoin Rainbow chart, a widely used tool for predicting Bitcoin's price movements, has recently indicated a potential bull run to $200,000 by the end of 2025. This forecast is based on the length of previous cycles, with the chart suggesting that the peak of this cycle could occur in the fourth quarter of 2025, possibly as early as November. This aligns with some analysts' forecasts, which predict Bitcoin's price top to be between $180,000 and $250,000 by 2025. However, it is crucial to remember that these are analyst forecasts and not guaranteed outcomes.

The Bitcoin Rainbow chart is a logarithmic regression model that uses Bitcoin's price and the number of days since its inception to predict future price movements. The chart is divided into color-coded bands, each representing different levels of optimism or pessimism about Bitcoin's future price. The current forecast places Bitcoin in the green band, indicating a bullish trend.

Despite the optimistic forecast, the Bitcoin Rainbow chart has its critics. Some analysts argue that the chart's predictions are based on historical data and may not accurately reflect future price movements. Additionally, the chart does not account for external factors such as regulatory changes or market sentiment, which could significantly impact Bitcoin's price.

Global monetary policies have been inflationary, which could spur demand for Bitcoin. With Bitcoin's halving completed in April 2024, this cycle's end may be drawing closer, although it is not imminent. The question remains: how much higher can the price go this time?

Using a more conservative model of the Bitcoin Rainbow Chart called the Halving Price Regression (HPR), it was attempted to mark where the current cycle top might arrive. The HPR excludes the hype cycle and plots a non-linear regression curve based only on BTC’s price on three halving dates. Based on the length of the previous cycle, this cycle’s top could arrive sometime in Q4 2025. Assuming it is the start of November, Bitcoin’s Rainbow Chart suggested that the price would be at least $157,000, or even an optimistic $217,000.

It is notoriously hard to predict when the cycle could find its top, and what the price could be. In fact, another popular and reliable indicator, the Pi Cycle Top indicator, showed that the cycle might be nowhere near its zenith. The 350-day SMA x2, the purple line, would need to see a crossover by the 111-day moving average. At the time of writing, the former (purple) was at $172,000, while the latter (cyan) was $97,700. This suggested that should this indicator fire a top signal again, Bitcoin’s 111-day MA would have to climb to at least $172,000.

To drive the 111-day moving average that high, BTC’s price must go even higher, and stay higher. If Bitcoin’s Rainbow Chart and the Pi Cycle Top Indicator prove reliable once again, we could see the price push well above $200,000. However, it is important to note that these are analyst forecasts and not guaranteed outcomes.

While Bitcoin tested the $109,600 resistance zone on July 7, it faced rejection, and within 16 hours, the price dipped by 1.4%. Last week, the $110,000 resistance zone had been tested unsuccessfully, bringing the price down 2.77% to $107,400. The price action in the short term indicated consolidation and a spring coiling before the next move. Bitcoin remaining above the $100,000-mark should fill investors with confidence. And yet, questions around its broader adoption remain relevant. In fact, the CIO of Miller Value Partners commented on Bitcoin’s popularity amongst institutional investors recently. He noted that it’s all a game of risk management for TradFi.