Bitcoin Rainbow Chart's 'Fire Sale' Duration Hits Record High
According to the Bitcoin rainbow price chart, Bitcoin has spent more time in the 'Fire Sale' zone than at any other time in history.
The chart is based on a logarithmic regression model that divides prices into colored valuation bands from 'Fire Sale' to bubble peak.
The current Bitcoin price hovers around $63,000, within the model's lowest valuation range, and the duration has reached a new high.
Some analyses indicate that the volatility-adjusted Z-score has reached its lowest level since 2016, showing extreme undervaluation relative to long-term trends.
There is a divergence in the market regarding this signal; some view it as a rare buying opportunity, while others worry that the model's assumptions may fail.
From a market mechanism perspective, the long-term undervaluation range attracts discussions about buying on dips, accumulation of capital flows, and holding strategies, while event-driven narratives strengthen the cycle bottom narrative, putting pressure on short-term trading and benefiting long-term holders.
Supplementary data shows that Bitcoin is currently trading at about a 66% discount to the model price.
Source: Public Information
ABAB AI Insight
The Bitcoin rainbow chart, as a long-term valuation tool, has previously shown 'Fire Sale' signals at multiple cycle bottoms followed by rebounds, with historical behavior indicating extreme deviations from the logarithmic growth trend.
In terms of capital flow, the current prolonged stay may stem from macro liquidity, ETF flows, and leverage changes, motivated by the market's repricing of old cycle patterns, strategically prompting investors to distinguish between valuation signals and actual bottom confirmations.
Similar cases can be seen in the brief hot selling periods of 2015, 2018, and 2022, with Bitcoin currently in a phase of institutionalization and prolonged cycles.
Structural judgments indicate a transfer of pricing power: because the traditional rainbow model is based on historical logarithmic trends, when the duration breaks precedents, it forces the market to shift from purely technical bands to comprehensive liquidity and fundamental judgments, with pricing power shifting from model signals to actual capital flows.
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