What is the Bitcoin Rainbow Chart and How Does it Work?

BItcoin Rainbow Chart

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The Bitcoin rainbow chart is a visualization of the price of Bitcoin over time. It is so called because the graph shows the price’s value in light blue, dark blue, and green, with the darkest shade being one bitcoin’s value at its most recent peak and light green being one bitcoin’s value at its lowest point.

This colour scheme has been adopted by many other cryptocurrencies to show their own prices in a similar way.

What is the Bitcoin Rainbow Chart?

The price of Bitcoin changes constantly, and it can be difficult to keep track of the current value. The rainbow chart solves this problem by allowing you to see exactly how much the price has changed since a previous date, with the colour representing the price at that time. With this chart, you can see Bitcoin’s current value in relation to its previous high and low prices.

Using this blockchain chart, you can also study past Bitcoin trends and make predictions about future values as well. The range of colours is determined by a number of factors, including the length of time that has passed since Bitcoin’s previous price change.

Lighter colours are used for the most recent highs and lows, with darker shades used for older highs and lows in the chart. The colours are also positioned differently on the chart depending on their distance from the most recent high or low.

How does Rainbow Chart work?

Every day the price of bitcoin changes a little, and the prices are calculated from global news providers, as well as from bitcoin exchanges around the world. It is often hard to discern the actual value of bitcoin in the early days, and it’s constantly changing. This chart makes it easy to see how much the value has changed in relation to its previous day. The chart also shows how many bitcoins have been traded over that time period. The colour rainbow represents the different values.

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The colours on the chart reflect a timeline of the price of bitcoin over time. Colours generally change as the price fluctuates. The chart includes a light blue bar for each changing day to show how many bitcoins have been traded per day.

The colours on the bar are represented by a rainbow pattern, which changes depending on how much bitcoin has changed in price over that particular day. Bitcoin’s value can vary greatly from one day to another, and this is reflected in the rainbow pattern. Click here for more information.

Advantages of rainbow charts

1. You can see how much the price has fluctuated historically.

2. You can see how much the price of bitcoin has changed in relation to its historical price points.

3. You can see the total number of bitcoins traded over a certain period of time. This shows you the amount of liquidity in the marketplace.

Disadvantages of rainbow charts

1. The rainbow chart can be confusing at first.

2. It can be difficult to determine the actual price from the chart because bitcoin’s value changes so quickly and is constantly fluctuating. This makes it hard to get a good read on the chart and understand what the price really is at that time. You have to look at several different charts to get a better understanding of the value at any point in time. The rainbow chart does not provide this for you.

How to read the Bitcoin Rainbow Chart?

Bitcoin price history is represented by a sequence of numeric values. These numbers can be arranged in long columns and rows to create a price chart. Each column in the Bitcoin price history represents an hour, day, week, month, or even year of the bitcoin’s life.

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Each row then represents the value of one bitcoin at one specific time during that period. The number inside each cell reflects the Bitcoin value at that time. A rainbow price chart is a type of bitcoin chart that shows the price history of bitcoins through a colourful graph.

Instead of showing prices in numbers or having a standard colour for each period, Bitcoin rainbow charts present information about historical prices via a multicolor gradient. This makes it much easier to see the changing value of the cryptocurrency over time, as well as show how many bitcoins were traded each day.

Conclusion

The Bitcoin rainbow chart is a good way to visualize the price of bitcoin so that you can better understand the value of the cryptocurrency. Bitcoin as a currency has really taken over the world because of its decentralized nature and ease of transfer which can’t be compared with other cryptocurrencies.

There are many bitcoin price chart applications available, but none of them uses the rainbow chart or has a similar design. Using bitcoin price charts with the rainbow design can help you better understand how much bitcoin has fluctuated over time.

Bitcoin Rainbow chart article and permission to publish here provided by Chiranjit Sinha. Originally written for Supply Chain Game Changer and published on November 25, 2022.
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