What the rainbow chart is
The rainbow chart fits a long-run model to Ethereum on a log-price scale, then builds bands around that path. Those bands help frame whether ETH looks compressed, roughly fair, or historically extended.
What it is good for
- Long-horizon valuation context
- Comparing current price to historical trajectory
- Separating cyclical extremes from ordinary movement
What it is not good for
- Precise timing
- Short-term trade entries
- Ignoring trend and momentum data
Best use
The rainbow chart works best as a slow-moving context layer. It becomes much more useful when combined with faster signals like RSI, volatility, drawdown, and moving-average structure.