When Crypto Advocates Mock the Rainbow Chart, the Ending Result is, Well, Quite Colorful!
Many Crypto advocates predicted it would eventually come back around; The Rainbow Chart is making a spectacular return to the crypto analytics scene after it was “mocked” and subsequently dropped by many crypto exchanges in 2018. Some crypto investors and traders still fondly remember the rainbow chart as a catalyst in the 2018 cryptocurrency market crash.
What is the rainbow chart exactly?
In 2018, trading platforms began displaying the rainbow chart due to the introduction of USDT (Tether coin). This chart turned out to be ‘heavier’ than the general positive sentiment on the market, making it difficult for investors to identify what coins were really worth. As a result, trading platforms decided to ditch the chart entirely.
Why is the Rainbow Chart a Big Deal?
The Rainbow Chart is a tool intended to provide a clearer picture of the cryptocurrency markets. By being able to navigate accurately through the sea of coin dynamics, from the highs and lows to the market’s open and close prices, crypto investors are now able to gain a better understanding of individual coins.
The range of colors on the Rainbow Chart is also meant to echo the oscillations of the market. When a coin’s value rises, the price shifts up and its color on the chart shifts from green to orange. When the price drops, it moves in the opposite direction on the chart and the color darkens into a blue or purple hue.
What are Crypto Advocates Saying?
Most advocates appear to be in agreement when it comes to the reintroduction of the Rainbow Chart. By providing a more clear and accurate picture of the market, the chart should be a helpful marker for managing risk and understanding trends.
Here’s some of the things Crypto Advocates are saying:
- Crypto investors should use the Rainbow Chart to study a specific coin’s price history and determine whether the current price is in-line with historical trends.
- The chart has provided a much-needed ‘reality check’ for crypto traders by helping them identify coins with false prices that are divorced from the fundamentals.
- The Rainbow Chart is helping investors avoid fraud coins, since it provides a transparent view of the pricing within individual markets.
Final Thoughts
The Rainbow Chart is back and it’s definitely here to stay! Whether we like it or not, the Rainbow Chart is one of the best tools crypto investors can use to stay on top of their investments. So go ahead, mock it all you want, but make sure you learn to use it right if you don’t want any nasty rainbow surprises down the line!
