Bitcoin has fallen by about 50 per cent since the last round, falling near $6.25 million and breaking down the lowest “bitcoin rainbow map” that has long been of interest to the market. This change has led the market to revisit whether the old model, which relies on the historical cycle, is also applicable to the current market, which is driven by ETF, institutional finance and macro factors.
Down the rainbow.
The Rainbow Map was originally presented by Reddit user Azop in 2014 and, based on a logarithmic growth curve, divides the long-term movement of bitcoin into different colours to respond to changes in market sentiment. By original version, current prices have fallen into the purple area known as “Bitcoin Is Dead”.
However, this region does not mean that bitcoin really loses value. In the past, the market generally viewed it as a sign of a period of extreme pessimism, rather than a direct judgement of the asset outlook. When bitcoin fell to about $15 million in 2022, it also entered a similar zone, which was then gradually stabilized.
The analyst's perception is divided.
There was a marked divergence of views within the industry around this fall. According to some analysts, this is more a sign that bitcoin is underestimated; it is also argued that the real possibility of failure is not bitcoin, but the rainbow itself.
The co-founder of XYO, Markus Levin, indicated that prices had dropped for the first time in a range that had been maintained for more than a decade, suggesting that the model structure might have changed. In his view, that did not mean that bitcoin was “dead”, but rather that such old models, which were built in early, volatile and low-liquid markets, were losing their interpretive power.
The chief analyst in Bitget, Ryan Lee, argued that the rainbow map could still serve as a reference for long-term emotions, but should not be used as a predictive tool. He noted that such models relied mainly on historical price regressions and failed to incorporate factors such as macro-environment, fundamentals and changes in market structure.
ETF Funds change pricing logic
Behind this round of controversy, the greater changes came from the bitcoin market structure itself. In October 2025, Bitcoin rose to a historical high of $126,000, but did not touch the red zone at the top of the rainbow map; now prices have fallen down the line, showing a clear departure from the old model.
In addition to the Rainbow Map, the Stock-to-Flow model, which had received widespread attention, also failed to accurately reflect price performance after halving in 2024. The market is increasingly convinced that, with the inflow of ETF funds, the increase in institutional allocation and the dynamic nature of derivatives transactions, bitcoin pricing is no longer fully in line with the last four-year cycle.
A number of interviewees mentioned that ETF foreclosure, derivative silos and macro-risk preferences were having a more direct impact on prices following increased institutional participation. Today's bitcoin is closer to a larger, relatively volatile asset than was the case in an earlier, dispersed and less liquid market.
The market values emotional signals.
At present, bitcoin prices are close to the level at which they were halved in April 2024, which is inconsistent with the expectations of many markets for the current cycle. As a result, the rainbow was seen as an emotional signal rather than as the basis for determining the direction of the post-market alone.
Analysts generally believe that a subsequent re-entry of Bitcoin into the rainbow map would indicate that the model still has some reference value; and that continued off-site operation could mean that such a historical-cycle-based valuation framework would need to be replaced by a new market observation methodology.