Crypto Basics

What is the Bitcoin Rainbow Chart and How to Use It?

Learn everything about Bitcoin Rainbow Chart and how to use it, in this descriptive guide.
Marcus K
6 Minutes
MIN

Are you ready to unlock the secrets of Bitcoin's price movements? Look no further than the Bitcoin Rainbow Chart! This colorful chart is a powerful tool for traders and investors looking to better understand the market.

In this article, we're going to cover the ins and outs of the bitcoin rainbow chart. Let's start by understanding what it is, how it works and how you can use it to make more informed investment decisions.

What is the Bitcoin Rainbow Chart?

The Bitcoin Rainbow Chart is a technical analysis tool that visualizes Bitcoin's historical price movements. It's called a "rainbow" chart because it uses different colors to represent different price ranges. The chart consists of seven colored bands, each representing a different percentage increase in Bitcoin's price.

The seven bands on the chart are:

  • Dark Red: 0% to 20% increase
  • Red: 20% to 50% increase
  • Orange: 50% to 100% increase
  • Yellow: 100% to 200% increase
  • Green: 200% to 400% increase
  • Blue: 400% to 800% increase
  • Purple: 800% and above increase

Each band has a corresponding range of Bitcoin prices that falls within that band. For example, the Dark Red band represents a price range of $0 to $9.8, while the Purple band represents a price range of $19,762 to infinity.

History of the Bitcoin Rainbow Chart

The Bitcoin Rainbow Chart has an interesting history that dates back to the early days of Bitcoin. The first version of the chart was created by a Reddit user named Azop as a fun way to depict Bitcoin's price history.

However, it wasn't until a trader known as "Trolololo" on the BitcoinTalk forum developed the second version of the chart that it gained widespread recognition as a technical analysis tool. Trolololo paired the rainbow chart with logarithmic regression, creating a more sophisticated version of the chart that has become a valuable tool for traders and investors alike.

Over time, the chart evolved to include seven different colored bands, each representing a different percentage increase in Bitcoin's price. Today, the Bitcoin Rainbow Chart is a widely recognized tool in the cryptocurrency community, used by traders and investors to gain insights into Bitcoin's market movements.

How to Use the BTC Rainbow Chart?

Now that you know what the Bitcoin Rainbow Chart is, let's talk about how to use it. The Rainbow Chart can be used to help traders and investors identify potential buying and selling opportunities. The chart can also be used to help investors gauge the overall health and strength of the Bitcoin market.

Here are some tips on how to use the Rainbow Chart:

Identify the current price band: The first step in using the Rainbow Chart is to identify the current price band that Bitcoin is in. This will help you determine whether Bitcoin is currently overvalued or undervalued.

Look for potential buying opportunities: If Bitcoin is in one of the lower price bands (Dark Red, Red, or Orange), this could be a good opportunity to buy. These lower price bands typically indicate that Bitcoin is undervalued.

Look for potential selling opportunities: If Bitcoin is in one of the higher price bands (Green, Blue, or Purple), this could be a good opportunity to sell. These higher price bands typically indicate that Bitcoin is overvalued.

Consider the trend: The Rainbow Chart can also be used to identify trends in Bitcoin's price movements. If Bitcoin is consistently moving up the chart, this could indicate a bullish trend, while a consistent move down the chart could indicate a bearish trend.

Use other indicators: While the Rainbow Chart can be a helpful tool, it's important to use other indicators and analysis methods in conjunction with it. No single tool or method can provide a complete picture of the market.

It's also important to note that the Rainbow Chart is not a perfect tool. While it can be helpful in identifying potential buying and selling opportunities, it should not be the only tool used to make investment decisions. It's important to do your own research and analysis before making any investment decisions.

Is the BTC Rainbow Chart Accurate?

The BTC Rainbow Chart is a popular tool in the cryptocurrency world, but the question on many traders' minds is whether it's accurate or not.

While it's true that the chart is based on historical data and doesn't take into account future market conditions, it can still be a valuable tool when used in conjunction with other forms of analysis.

Critics of the Rainbow Chart argue that it's too simplistic and doesn't take into account the nuances of the market. While this may be true to some extent, it's important to remember that the chart is just one tool in a trader's toolbox.

Ultimately, the accuracy of the BTC Rainbow Chart depends on how it's used and in what context. Traders who rely solely on the chart may find themselves in trouble, but those who use it as part of a broader trading strategy may find it to be a valuable tool for gaining insights into Bitcoin's market movements.

Also Read - Is Bitcoin Dead? - Complete Analysis for BTC Investors

Limitations of the Bitcoin Rainbow Chart

Here are the main limitations of the Bitcoin Rainbow Chart:

  1. It is biased towards historical data and may not reflect recent developments or events.
  2. It has limited predictive power and should not be used as the sole basis for investment decisions.
  3. The parameters used in the chart are subjective and can lead to different results and conclusions.
  4. It may not be applicable to other cryptocurrencies.
  5. It is susceptible to manipulation by market participants.

Are there more Crypto Rainbow Charts?

There are indeed more crypto rainbow charts available, as the concept has been adapted and expanded upon by various individuals and organizations in the crypto space. While the original Bitcoin Rainbow Chart remains one of the most well-known examples, other rainbow charts have emerged for different cryptocurrencies, such as Ethereum.

The Ethereum Rainbow Chart and the Bitcoin Rainbow Chart share similarities in that they both use a similar color-coded system to depict the historical price movements of their respective cryptocurrencies.

However, there are also differences between the two charts. The Ethereum Rainbow Chart has a different set of parameters, as the chart is tailored to the unique characteristics of the Ethereum blockchain and its associated token.

Additionally, the Ethereum Rainbow Chart has a different color scheme than the Bitcoin Rainbow Chart, with shades of green representing bullish sentiment and shades of red representing bearish sentiment.

Bottom Line

In conclusion, the BTC Rainbow Chart is a useful tool for traders and investors to better understand Bitcoin's price movements. By using the chart, traders can identify potential buying and selling opportunities.

While its accuracy may be questioned by some, it's important to remember that no single tool can predict the future of the market.

However, it's important to use the chart in conjunction with other analysis methods and to do your own research before making any investment decisions.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such.

Token Metrics does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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Token Metrics Team
Token Metrics Team

Recent Posts

Research

Top 100 Crypto Index: What It Is, How It’s Built, and Who It’s For (2025)

Token Metrics Team
6
MIN

If you’ve tried to “own the market” in crypto, you’ve felt the pain: chasing listings, juggling wallets, and missing rebalances while prices move. A top 100 crypto index aims to fix that—giving you broad exposure when the market is bullish and standing down when it’s not. Token Metrics Global 100 is our rules-based version of that idea: it holds the top-100 by market cap in bull regimes, moves to stablecoins in bear regimes, and rebalances weekly. You can see every rule, every holding, and every rebalance—then buy the index in ~90 seconds with an embedded on-chain flow.‍ → Join the waitlist to be first to trade TM Global 100.

Why a “Top 100 Crypto Index” Matters in October 2025

The market keeps cycling. New leaders emerge quickly. A “set-and-forget” bag can fall behind, while manual baskets burn hours and rack up slippage. Search interest for crypto index, regime switching, and weekly rebalancing keeps growing because people want a simple, disciplined core that adapts.

A top 100 crypto index is a rules-based basket that tracks the largest 100 crypto assets by market cap, typically rebalanced on a schedule to keep weights aligned with the market. In 2025, that alone isn’t enough. You also need discipline for downtrends. Token Metrics adds a regime-switching layer to move to stablecoins during bear phases—so you can participate in upside and sit out major drawdowns with a consistent, rules-based approach.

How the TM Global 100 Index Works (Plain English)

Regime switching:

  • Bullish: The index holds the top-100 assets by market cap.
  • Bearish: The index exits positions and moves fully to stablecoins until a bullish re-entry signal.

Weekly rebalancing:

  • Every week, the composition and weights update to reflect current market-cap rankings. No manual list maintenance. No “oops, I missed the new entrant.”

Transparency:

  • Strategy modal explains selection criteria and regime logic.
  • Gauge → Treemap → Transactions Log shows the signal, the real-time holdings view, and every rebalance/regime switch.

You’ll always see what you own, how it changed, and why.

What you’ll see on launch

  • Price tile, 100 tokens, “rebalances weekly,” and one-click Buy.
  • Gauge to visualize the market signal.
  • Holdings Treemap and Table to inspect exposure.
  • Transactions Log to review every rebalance.
  • See the strategy and rules.

Benefits at a Glance (Why This Beats DIY)

  • Time saved: Skip hours of asset chasing and manual spreadsheets; rebalances happen automatically.
  • Lower execution drag: One index buy can reduce slippage vs. piecing together 20–50 small orders across chains.
  • Never miss a rebalance: Weekly updates and on/off risk switches run by rules, not vibes.
  • Rules-based switching: A clear trigger defines when to sit in stablecoins—no second-guessing.
  • Full visibility: The gauge, treemap, table, and log make the process auditable at a glance.
  • Operational simplicity: An embedded wallet, 90-second buy flow, fee and slippage estimates upfront.

Step-by-Step: How to Get Early Access (Waitlist)

  1. Open the Indices hub and tap TM Global 100.
  2. Join the waitlist with your email—this flags you for day-one access.
  3. (Optional) Connect your wallet so you’re ready for the embedded checkout.
  4. Launch day: You’ll get an email and in-app prompt when trading opens.
  5. Buy in ~90 seconds: Connect, review fees/slippage/estimated value, confirm.
  6. Track positions: See your holdings, rebalances, and P&L in My Indices.
  7. Repeat or add funds: Rebalancing is handled weekly; you can add or sell anytime.

→ Join the waitlist to be first to trade TM Global 100.

Decision Guide: Is This Right for You?

  • Hands-Off Allocator: Want broad market exposure without managing coin lists? Consider it.
  • Active Trader: Want a disciplined core you don’t have to watch while you chase setups? Consider it.
  • TM Member (Research-Heavy): Prefer to keep your picks, but want a market base layer? Consider it.
  • New to Crypto: Need transparency + clear rules? Consider it, with a small test first.
  • Hyper-Niche Maxi: If you only want 1–2 coins, an index may be too broad.
  • Short-Term Scalper: You may still benefit from a core allocation, but active trading stays your main driver.
  • Tax-/Jurisdiction-Sensitive Users: Check your local rules before investing.
  • Institutional Explorers: Looking for transparent rules, logs, and weekly governance? Worth evaluating.

FAQs

What is a top 100 crypto index?

A rules-based basket tracking the largest 100 assets by market cap, typically with scheduled rebalancing. Token Metrics Global 100 adds regime switching to stablecoins during bear markets.

How often does the index rebalance?

Weekly. In addition, if the market signal flips, the entire portfolio may switch between tokens ↔ stablecoins outside the weekly cycle.

What triggers the move to stablecoins?

A proprietary market-regime signal. When it’s bearish, the index exits tokens to stablecoins and waits for a bullish re-entry signal.

Can I fund with USDC or fiat?

On launch, funding options surface based on your connected wallet and supported chains. USDC payouts are supported when selling.

Is the wallet custodial?

The embedded wallet is self-custodial—you control your funds.

How are fees shown?

Before you confirm a buy, you’ll see estimated gas, platform fee, max slippage, and minimum expected value—all up front.

How do I join the waitlist?

Go to the TM Global 100 page or the Indices hub and click Join Waitlist. You’ll get notified at launch with simple steps to buy.

Security, Risk & Transparency

  • Self-custody: Embedded, self-custodial smart wallet; you control keys.
  • 2FA & device checks: Standard authentication best practices.
  • Fee/slippage transparency: All estimates are shown pre-trade; you confirm with eyes open.
  • On-chain visibility: Holdings, rebalances, and regime switches appear in the Transactions Log.
  • Rule constraints: Signals can be wrong; spreads and volatility can impact outcomes.
  • Regional considerations: Availability and tax treatment vary by jurisdiction.

Crypto is volatile and can lose value. Past performance is not indicative of future results. This article is for research/education, not financial advice.

A top 100 crypto index is the simplest path to broad market exposure—if it’s built with discipline. Token Metrics Global 100 combines transparent rules, weekly rebalancing, and a regime switch to stablecoins, so you can focus on your strategy while the core maintains itself. Now’s the time to claim early access.‍ → Join the waitlist to be first to trade TM Global 100.

Research

The Case for Rules-Based Crypto Indexing After a Volatile Cycle (2025)

Token Metrics Team
5
MIN

After a whipsaw year, many investors are asking how to stay exposed to crypto’s upside without riding every drawdown. Rules-based crypto indexing is a simple, disciplined answer: follow a transparent set of rules rather than gut feelings. The Token Metrics Global 100 puts this into practice—own the top-100 in bullish regimes, rotate to stablecoins in bearish regimes, and rebalance weekly. On top of that, you can see what you own in real time with a Holdings Treemap, Table, and Transactions Log. Less second-guessing, more process.

Join the waitlist to be first to trade TM Global 100.

Why Rules-Based Crypto Indexing Matters in October 2025

In a volatile cycle, emotion creeps in: chasing winners late, cutting losers early, or missing re-entry after fear. Rules-based crypto indexing applies consistent criteria—constituent selection, weighting, and rebalancing—so you don’t have to improvise in stress.

For readers comparing crypto index options, think of it as a codified playbook. A rules-based crypto index is a methodology-driven basket that follows predefined signals (e.g., market regime) and maintenance schedules (e.g., weekly rebalancing), aiming for repeatable behavior across cycles.

Rules-based crypto indexing is a systematic approach that tracks a defined universe (e.g., top-100 by market cap) and maintains it on a fixed cadence, with explicit rules for when to hold tokens and when to de-risk into stablecoins.

How the TM Global 100 Index Works (Plain English)

  • Regime switching: When the market signal is bullish, the index holds the top 100 assets by market cap; when bearish, it moves to stablecoins until conditions improve.
  • Weekly rebalancing: Constituents and weights update weekly to reflect the latest market-cap rankings—capturing leadership changes without manual effort.
  • Transparency: A Strategy modal and Gauge → Treemap → Transactions Log show the signal, current mix, and every change recorded.

What you’ll see on launch: Price tile, “tokens: 100,” “rebalances weekly,” and a fast ~90-second Buy flow with fee/slippage previews.

See the strategy and rules. (TM Global 100 strategy)

Benefits at a Glance (Why This Beats DIY)

  • Time & operational drag: Skip juggling 20–100 tickers, wallets, and venues.
  • Execution quality: A single indexed flow can help reduce piecemeal slippage and duplicated fees.
  • No missed rotations: Weekly rebalancing and regime switching reduce the cost of being late to trends—or late to de-risk.
  • Always-on visibility: Holdings treemap + table + transactions log remove the black box.
  • Behavioral edge: Clear rules can limit panic sells and FOMO buys during turbulence.
  • Portfolio role: A disciplined core that you can complement with selective satellites.

Step-by-Step: How to Get Early Access (Waitlist)

  1. Open the Token Metrics Indices hub and select TM Global 100.
  2. Click Join Waitlist and enter your email for launch-day access.
  3. (Optional) Connect your wallet so you’re ready to fund.
  4. On launch, review the Gauge → Treemap → Transactions to confirm the current mix.
  5. Tap Buy Index, review fees/slippage, and confirm (about 90 seconds end-to-end).
  6. Track your position and every weekly rebalance in My Indices and the Transactions Log.

Join the waitlist to be first to trade TM Global 100.

Decision Guide: Is This Right for You?

  • Hands-Off Allocator: Want broad market beta with an explicit de-risking rule. Consider if you resist micromanaging.
  • Active Trader: Prefer a disciplined core that moves to stablecoins in bears while you express edge with satellites.
  • Long-Term Believer: Seek systematic participation in leadership changes via weekly rebalancing.
  • Transparency-First User: Require auditable holdings and a transactions log—no black boxes.
  • Tax/Compliance Conscious: Prefer consolidated rebalances over many ad hoc trades.
  • TM Research Follower: Want to pair Token Metrics insights with a rules-based execution layer.
  • New to Crypto Baskets: Want to avoid building and maintaining a DIY index.

FAQs

What is a rules-based crypto index?

A methodology-driven basket that follows predefined rules for asset selection, weighting, and maintenance. In TM Global 100, that means top-100 exposure in bullish regimes and stablecoins in bearish regimes, with weekly rebalancing and full transparency.

How often does the index rebalance?

Weekly. This cadence refreshes constituents and weights to align with current market-cap rankings; separate regime switches can move between tokens and stablecoins.

What triggers the move to stablecoins?

A documented market signal. When it turns bearish, the index exits to stablecoins; when bullish resumes, it re-enters the top-100 basket.

Can I fund with USDC or fiat?

Funding options will surface based on your connected wallet and supported rails. USDC settlement on sells is supported; fiat on-ramps may be added over time.

Is the wallet custodial?

No. The embedded wallet is self-custodial—you control your keys and assets.

How are fees shown?

Before confirming a trade, you’ll see estimated gas, platform fee, max slippage, and min expected value—so you can proceed with clarity.

How do I join the waitlist?

Go to the Indices hub, open TM Global 100, and enter your email. You’ll receive a launch-day link to buy.

Security, Risk & Transparency

  • Self-custody by default: You control your wallet.
  • Defense-in-depth: 2FA/account security features and explicit transaction prompts.
  • Clear economics: Fee and slippage previews before you confirm.
  • Auditability: Holdings treemap + table + transactions log document every change.
  • Methodology limits: Regime logic may not capture every market nuance; weekly cadence can differ from intraday moves.
  • Regional availability: On-ramps and features can vary by jurisdiction.

Crypto is volatile and can lose value. Past performance is not indicative of future results. This article is for research/education, not financial advice.

Research

The Case for Rules-Based Crypto Indexing After a Volatile Cycle (2025)

Token Metrics Team
5
MIN

After a whipsaw year, many investors are asking how to stay exposed to crypto’s upside without riding every drawdown. Rules-based crypto indexing is a simple, disciplined answer: follow a transparent set of rules rather than gut feelings. The Token Metrics Global 100 puts this into practice—own the top-100 in bullish regimes, rotate to stablecoins in bearish regimes, and rebalance weekly. On top of that, you can see what you own in real time with a Holdings Treemap, Table, and Transactions Log. Less second-guessing, more process.→ Join the waitlist to be first to trade TM Global 100.

Why Rules-Based Crypto Indexing Matters in October 2025

In a volatile cycle, emotion creeps in: chasing winners late, cutting losers early, or missing re-entry after fear. Rules-based crypto indexing applies consistent criteria—constituent selection, weighting, and rebalancing—so you don’t have to improvise in stress.

For readers comparing crypto index options, think of it as a codified playbook. A rules-based crypto index is a methodology-driven basket that follows predefined signals (e.g., market regime) and maintenance schedules (e.g., weekly rebalancing), aiming for repeatable behavior across cycles.

Rules-based crypto indexing is a systematic approach that tracks a defined universe (e.g., top-100 by market cap) and maintains it on a fixed cadence, with explicit rules for when to hold tokens and when to de-risk into stablecoins.

How the TM Global 100 Index Works (Plain English)

  • Regime switching: When the market signal is bullish, the index holds the top 100 assets by market cap; when bearish, it moves to stablecoins until conditions improve.
  • Weekly rebalancing: Constituents and weights update weekly to reflect the latest market-cap rankings—capturing leadership changes without manual effort.
  • Transparency: A Strategy modal and Gauge → Treemap → Transactions Log show the signal, current mix, and every change recorded.

What you’ll see on launch: Price tile, “tokens: 100,” “rebalances weekly,” and a fast ~90-second Buy flow with fee/slippage previews.

See the strategy and rules. (TM Global 100 strategy)

Benefits at a Glance (Why This Beats DIY)

  • Time & operational drag: Skip juggling 20–100 tickers, wallets, and venues.
  • Execution quality: A single indexed flow can help reduce piecemeal slippage and duplicated fees.
  • No missed rotations: Weekly rebalancing and regime switching reduce the cost of being late to trends—or late to de-risk.
  • Always-on visibility: Holdings treemap + table + transactions log remove the black box.
  • Behavioral edge: Clear rules can limit panic sells and FOMO buys during turbulence.
  • Portfolio role: A disciplined core that you can complement with selective satellites.

Step-by-Step: How to Get Early Access (Waitlist)

  1. Open the Token Metrics Indices hub and select TM Global 100.
  2. Click Join Waitlist and enter your email for launch-day access.
  3. (Optional) Connect your wallet so you’re ready to fund.
  4. On launch, review the Gauge → Treemap → Transactions to confirm the current mix.
  5. Tap Buy Index, review fees/slippage, and confirm (about 90 seconds end-to-end).
  6. Track your position and every weekly rebalance in My Indices and the Transactions Log.

→ Join the waitlist to be first to trade TM Global 100.

Decision Guide: Is This Right for You?

  • Hands-Off Allocator: Want broad market beta with an explicit de-risking rule. Consider if you resist micromanaging.
  • Active Trader: Prefer a disciplined core that moves to stablecoins in bears while you express edge with satellites.
  • Long-Term Believer: Seek systematic participation in leadership changes via weekly rebalancing.
  • Transparency-First User: Require auditable holdings and a transactions log—no black boxes.
  • Tax/Compliance Conscious: Prefer consolidated rebalances over many ad hoc trades.
  • TM Research Follower: Want to pair TM insights with a rules-based execution layer.
  • New to Crypto Baskets: Want to avoid building and maintaining a DIY index.

FAQs

What is a rules-based crypto index?

A methodology-driven basket that follows predefined rules for asset selection, weighting, and maintenance. In TM Global 100, that means top-100 exposure in bullish regimes and stablecoins in bearish regimes, with weekly rebalancing and full transparency.

How often does the index rebalance?

Weekly. This cadence refreshes constituents and weights to align with current market-cap rankings; separate regime switches can move between tokens and stablecoins.

What triggers the move to stablecoins?

A documented market signal. When it turns bearish, the index exits to stablecoins; when bullish resumes, it re-enters the top-100 basket.

Can I fund with USDC or fiat?

Funding options will surface based on your connected wallet and supported rails. USDC settlement on sells is supported; fiat on-ramps may be added over time.

Is the wallet custodial?

No. The embedded wallet is self-custodial—you control your keys and assets.

How are fees shown?

Before confirming a trade, you’ll see estimated gas, platform fee, max slippage, and min expected value—so you can proceed with clarity.

How do I join the waitlist?

Go to the Indices hub, open TM Global 100, and enter your email. You’ll receive a launch-day link to buy.

Security, Risk & Transparency

  • Self-custody by default: You control your wallet.
  • Defense-in-depth: 2FA/account security features and explicit transaction prompts.
  • Clear economics: Fee and slippage previews before you confirm.
  • Auditability: Holdings treemap + table + transactions log document every change.
  • Methodology limits: Regime logic may not capture every market nuance; weekly cadence can differ from intraday moves.
  • Regional availability: On-ramps and features can vary by jurisdiction.

Crypto is volatile and can lose value. Past performance is not indicative of future results. This article is for research/education, not financial advice.

After a volatile cycle, the edge is process. Token Metrics Global 100 combines rules-based crypto indexing, weekly rebalancing, and full transparency so you can participate in upside and step aside during bears—without running your own spreadsheets. If that’s the core you’ve been missing, join the waitlist now.

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