The Rainbow Chart: A Long-Term Valuation Tool for Bitcoin
Introduction
The Rainbow Chart is a long-term valuation tool for Bitcoin that uses a logarithmic growth curve to forecast future price movements.
The chart was created by Bitcoin analyst PlanB and is based on the theory that Bitcoin's price follows a power law distribution. This means that the price of Bitcoin tends to grow exponentially over time, with periods of rapid growth followed by periods of consolidation.
The Rainbow Chart plots logarithmic curves fitted to major Bitcoin bear market tops and bottoms.
The top line of the chart is fitted to bull tops, while the bottom line is fitted to bear bottoms. The chart suggests that Bitcoin's price is currently in a period of consolidation and is likely to enter a new bull market in the near future.
The Bitcoin power law is a mathematical model that describes the long-term price trajectory of Bitcoin.
The power law states that the price of Bitcoin will grow exponentially over time, with the rate of growth slowing down over time. The Rainbow Chart is a visual representation of the Bitcoin power law.
Bitcoin's logarithmic regression growth chart suggests how Bitcoin's price could grow over time.
The chart shows that Bitcoin's price could reach $1 million by 2025 and $10 million by 2030. However, it is important to note that the chart is only a forecast and the actual price of Bitcoin may vary.
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