CHART Charting · Updated January 2026 · ~4 min · For TradingView desktop 3.2.1

Bitcoin Logarithmic Regression Bands: A Long-Term Valuation Channel

Bitcoin grows logarithmically over the long run (decelerating but persistent). Log regression bands fit a long-term trend line to historical price, then draw a channel around it — near the top is overvalued, near the bottom undervalued. The famous "rainbow chart" is a visualization of this.

Reading it

• Price near the lower band (cool/undervalued): historically a long-term accumulation zone;
• Price toward the upper band (warm/overvalued): historically cycle-top territory, high distribution risk;
• The channel's slope flattens over time — reflecting decelerating growth; don't linearly extrapolate the early slope.

Limits (important)

It's a very-long-term positioning tool that only answers "expensive or cheap," never "this week's move." And it's a backward-looking fit — the more history you add, the more it re-fits; don't treat it as precise prediction.