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Ethereum Rainbow Chart

The Rainbow Chart is a long-term valuation tool that uses a logarithmic growth curve to forecast the potential future price direction of ETH.

The Rainbow Chart is not investment advice! The Rainbow Chart is meant to be be a fun way of looking at long term price movements, disregarding the daily volatility “noise”.

How Rainbow Chart Works

Originally featured on Blockchain center, the Ethereum Rainbow Chart overlays color bands on top of the logarithmic regression curve in an attempt to highlight market sentiment at each rainbow color stage as price moves through it. Therefore highlighting potential opportunities to buy or sell.

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What Is The Ethereum Rainbow Chart Indicator?

The Rainbow Chart is a long-term valuation tool for Ethereum. It uses a logarithmic growth curve to forecast the potential future price direction of Ethereum.It overlays rainbow color bands on top of the logarithmic growth curve channel in an attempt to highlight market sentiment at each rainbow color stage as price moves through it. Therefore highlighting potential opportunities to buy or sell.As with all the charts on this website, the Rainbow chart is not investment advice. It is for educational and entertainment purposes only. There is no guarantee that past performance fit within the rainbow channel will continue to play out in the future.To date, Ethereum price has continued to stay within the rainbow color bands of the logarithmic growth channel.

How to Interpret The Rainbow Chart?

Because |variable| is still a relatively young asset class, its price movements are highly volatile. Although on a macro timeline |variable| is being adopted, which we can see in the general upwards price movement, it does experience market cycles. During these market cycles, the price of |variable| can increase parabolically and also drop very quickly. It also has very high daily volatility which investors need to be aware of.The ETH rainbow chart highlights where ETH price is in those cycles and provides a viewpoint on investor strategy. As mentioned earlier in this article, this chart and its legend labels are for entertainment purposes and do not constitute investment advice.The warmer upper colors of the rainbow chart show when the market is likely overheated. Such periods have historically proven to be good times for the strategic investor to begin taking some profits.