In the latest Bitcoin news today, the Bitcoin rainbow chart has changed colours quite literally. A new purple colour band has been added to the popular chart.
Like the Bitcoin fear and greed index, the Bitcoin rainbow chart is extensively referred to by users to predict the future price direction of Bitcoin.
Let's have a look at what the new colour band is all about.
What is the Bitcoin Rainbow Chart?
The rainbow chart superimposes rainbow-coloured bands on top of a logarithmic graph, representing Bitcoin's possible future price with market sentiments at each colour level.
The chart is described as a long-term Bitcoin valuation tool built by an early Bitcoiner named Azop.
If Bitcoin's price reaches the red colour band, it roughly indicates that the market is euphoric. This is often a good chance for investors to liquidate their Bitcoin holdings before any major price depreciations.
The Bitcoin Rainbow Chart gets a new purple colour band
Bitcoin has become slightly unpredictable as a result of the current bear market.
A new purple colour band has been added to the existing rainbow model, which is referred to as 1BTC=1 BTC.
A Twitter account by the name of rohmeo_de commented that the new indigo/purple band was always missing and plays a crucial role in explaining Bitcoin's 2020 dip.
However, several crypto enthusiasts were quick to label the new indigo band addition as a desperate attempt for the graph to stay relevant.
At the time of writing, Bitcoin's market position is exceedingly volatile. The cryptocurrency has recently recovered from a weekend downturn and is currently trading at $19,082.73. The coin is up 1.5% in the last 24 hours with a market cap of $365 billion.
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