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.