Bitcoin Falls Into Rainbow Chart’s ‘BTC Is Dead’ Zone for Only Second Time in History

Bitcoin is trading near $60,200, down roughly 50% from its October 2025 all-time high of $126,000, and has now dropped below the lowest band of the Bitcoin Rainbow Chart for only the second time in history landing in the original model’s purple “Bitcoin Is Dead” zone.

The last time BTC entered this zone was in 2022 around $15,000, just before the cycle bottomed out. Some analysts see this as a strong buy signal. Others think the chart itself has simply stopped working.

Is the Rainbow Chart Dead or Is Bitcoin Just Cheap?

Markus Levin, co-founder of XYO, says the chart breaking down is actually bullish.

“I do not read this as bitcoin being dead, I read it as the Rainbow Chart being dead, and that is actually a bullish statement about how far the asset has matured,” he said.

Ryan Lee, chief analyst at Bitget, takes a more cautious view. He says the chart is still useful for tracking long-term sentiment but was never meant to be a predictive tool. The model was built on historical price behavior, not the institutional flows, ETF activity and macro forces that now drive bitcoin’s price.

Emad Shahin, COO of Ethra, put it bluntly “The Rainbow Chart is a fitted regression with a sense of humor, not a forecasting tool.”

The broader issue is that bitcoin no longer behaves like a retail-driven, illiquid asset. With ETFs, institutional balance sheets and macro conditions now setting the price, older valuation models including the Rainbow Chart and Stock-to-Flow are struggling to keep up.