CryptoWeeklies / Glossary

What is a rainbow chart?

A rainbow chart takes a long-run trend line and draws coloured bands above and below it. Where price sits among the bands gives the market a label — accumulation at the bottom, euphoria at the top.

How are rainbow chart bands built?

The pages here fit a polynomial through log price to get a fair value baseline, then draw envelopes at one, two and three standard deviations of the residual — how far price has typically strayed from that fit. The result is a valuation map running from deep accumulation through to euphoria.

The phase label on each page is simply which band today's price falls in:

• Max Despair (−3σ) — as far below trend as it has been.
• Bear Market / Accumulation — below trend.
• Fair Value — on the fitted line.
• Bull Market — above trend.
• Euphoria (+3σ) — as far above trend as it has been.

What weakness does every rainbow chart share?

The bands are fitted to history, so they are redrawn as history grows — a chart that looked accurate in one cycle can be refitted into a different shape after the next. A polynomial fit also has no mechanism behind it; nothing forces price to respect a curve that was drawn to match past price.

Read the phase label as a description of where price sits versus its own past, not as a forecast. For a forecast with actual confidence intervals, see the forecast pages.

Other models explained

• What is the 20-week moving-average risk level?
• What is the difference between the 200-day and 200-week moving average?
• What is the 200-week moving average?
• What is the altcoin season index?
• What is CAGR?
• What is a composite moving-average risk score?
• What is the crypto Fear & Greed Index?
• How is a crypto risk score calculated?
• Does dollar-cost averaging actually work?
• What is a Gravity Risk score?
• What is logarithmic regression?
• What is Cycle Position?
• How do you read a price forecast?
• What does Risk Level 1 to 10 mean?
• What are valuation bands?
• What is VWAP, and how is it different from TWAP?
• What is TWAP in crypto?

See the live numbers for 149 assets →

Model track records: every weekly reading the site published, beside what the price did next.

Weekly data: each week's published readings, dated and citable.