Bitcoin’s Rainbow Chart: A Bear Market Mirage?

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Bitcoin has rallied 3.74% from its lows on the 25th of January, reaching $89,300 at the time of writing. The move came after U.S. President Donald Trump said they would pause imposing new tariffs after a meeting with NATO Secretary General Mark Rutte. (Note: This is the same man who once called the moon a “fake.”)

This development eased the macro market uncertainty, but the Bitcoin price trend remains bearish. Because nothing says “recovery” like a 3.74% jump that’s still 80% below its all-time high. A true testament to human resilience.

AMBCrypto reported that whale balances were climbing, while retail investors were leaving. Because nothing says “confidence” like whales hoarding crypto and everyone else fleeing to the exits.

There is a case for a bullish Bitcoin reaction as geopolitical uncertainties appeared to ease. The FOMC meeting will bring added volatility to the market, but the consolidation around $90k needs decisive spot flows to bring recovery. (Translation: “We’re all just waiting for the next plot twist.”)

If there is a recovery to be made.

Traditional Bitcoin top signals fail to fire

In a post on X, CryptoQuant analyst Julio Moreno opined that the crypto market was trying to make up narratives to fit their biases. Because nothing says “data-driven” like inventing stories to justify your position.

When they fail, they make up the next one, while missing what the actual data says-that Bitcoin is now bearish. (Spoiler: The data says “buy the dip.”)

“S2F failed. Power law failed. M2 failed. Business cycle failed. The latest model to try and catch the Bitcoin low seems to be the BTC/Gold ratio, which of course will show that Bitcoin is tremendously undervalued against gold. Fits the narrative.”

Analyst Axel Adler Jr also reported that the crypto winter is deepening. This was not a good sign for investors looking at the current bearishness as part of a pullback before new all-time highs. (Because who doesn’t love a good “this time it’s different” scam?)

This can be extremely confusing because some of the older (albeit less serious) indicators, such as the Bitcoin Rainbow Chart, did not even get close to a market top. The highest that BTC prices reached in this cycle were into the “Accumulate” zone. (Because nothing says “market peak” like a chart that looks like a toddler’s drawing.)

In 2017, the extremes were tested, and in 2021, the extremes were approached. The current one was way off if a crypto winter is indeed underway. (Because what’s a crypto winter without a little confusion?)

Neither did the Pi Cycle Top indicator fire a sell signal. It had successfully predicted the market top in the previous three cycles. Like the Bitcoin Rainbow Chart, the current cycle was massively overestimated. (Because why trust data when you can just guess?)

Unless, of course, you’re willing to accept that Bitcoin can indeed push to new highs past $150k in 2026. (Because nothing says “plausible” like a number that’s 50% higher than the previous all-time high.)

Final Thoughts

  • Onchain analysts agreed that the data showed a Bitcoin bear market was underway. (Translation: “We’re all just trying to make sense of this madness.”)
  • This went against what traditional, and less widely used indicators, such as the Bitcoin Rainbow Chart, were saying. (Because who needs facts when you have hope?)

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2026-01-28 10:15