Bitcoin Power Law Rainbow Chart

Video Explanation

Bitcoin Power Law Rainbow Hybrid Chart Explained

The Bitcoin power law was created by Giovanni Santostasi (@Giovann35084111 on Twitter) in 2015. Giovanno is a physicist, neuroscientist, and financial analyst.

The power law aims to project the price of Bitcoin based on the following assumption:

Bitcoin's price, users, and mining power increase in a predictable way, like a city growing, where each part influences the others in a continuous feedback loop.

Where does the Rainbow come into the picture?

We combined our popular Bitcoin rainbow chart with the Bitcoin power law to create the Bitcoin power law rainbow.

Since the power law is based on time, we created a rainbow chart that is also based on time:

• The blue band represents 6 months above or behind the projected power law price (meaning price is on similar track to power law projection).
• Each band above represents another year ahead of the trend line.
• Green = 6 months to 1.5 years ahead of trend
• Yellow = 1.5 years to 2.5 years, etc

Explained another way:

If the Bitcoin price is in the blue zone, it means that is within 6-months of the projection based on the power law.

If it is in the green zone, that would mean it is somewhere from 6 months to 1 year and 6 months head of the power law projection.

If the Bitcoin price is in the purple zone, that means it is between 6 months and 1 year and 6 months behind the power law projection.