Bitcoin just broke below the floor of its famous Rainbow Chart into the ‘BTC is dead’ zone

Bitcoin peaked at $126,000 in October without reaching the Rainbow Chart’s upper red bands. Now, with BTC near $62,500, the price has fallen below the chart’s floor.

The divergence comes as other widely followed bitcoin valuation models have also struggled. The Stock-to-Flow model, which links bitcoin’s price to its programmed supply reductions, projected significantly higher prices following the 2024 halving than bitcoin ultimately achieved.

Mark Zalan, CEO of GoMining, agreed that the bottom band does not indicate a permanent collapse.

Bitcoin dead zone

“The ‘Bitcoin is Dead’ zone doesn’t mean Bitcoin is actually dead,” Zalan told CoinDesk. “Historically, it has often marked periods of extreme fear and undervaluation, which were later followed by recoveries. It signals sentiment more than certainty.”

Zalan said the chart remains useful, but “less precise than it once was.”

“The 2025 cycle showed that BTC doesn’t have to follow old patterns exactly,” Zalan said. “ETFs, institutions and changing market structure have altered the game.”

Bitcoin is trading near its April 2024 halving price, a development that runs counter to expectations for the current four-year cycle.

Levin said the chart confirms what the “cycle data has been showing us, the exponential growth assumptions baked into this chart were calibrated to a retail-driven, illiquid asset, not a $1.25 trillion market with ETF flows and institutional balance sheets setting the marginal price.”