As Bitcoin reaches fresh all-time highs, trading at $103,046 on May 9, 2025, market participants are increasingly turning to classic charting tools to anticipate the next moves. Two frameworks—the Rainbow Chart and the Stock-to-Flow (S2F) model—offer contrasting yet complementary views on the leading cryptocurrency's long-term trajectory.
Stock-to-Flow: Scarcity as a Price Driver
The S2F model quantifies scarcity by comparing existing supply (stock) to annual production (flow). For Bitcoin, the halving event every four years reduces the flow of newly mined coins, intensifying scarcity. The current price trajectory, shaded red to orange on the S2F chart, indicates that the market has just passed the last halving (red = 0 days to halving, blue = many days past). Historically, this phase has triggered vigorous rallies over the following 12–18 months.
Notably, Bitcoin's current market price closely aligns with the S2F projection, suggesting the model is performing more reliably than in earlier cycles. Forward projections based on post-halving patterns indicate an exponential climb to roughly $275,000 by late 2026. This reflects the core scarcity thesis: each halving reduces issuance and, all else being equal, should elevate price. The trend is further supported by institutional demand via ETFs and corporate holdings by firms like Strategy (formerly MicroStrategy).
Rainbow Chart: From FOMO to Bubble Territory
The Rainbow Chart, based on long-term logarithmic growth, uses colored bands to represent market sentiment phases. According to the latest version, Bitcoin's price will progress from the “FOMO” band (just above $100,000) into the “Is this a Bubble?” zone, targeting a range of $290,000 to $365,000 by late 2026. Early editions of the Rainbow Chart were criticized for being overly speculative due to limited data; subsequent revisions employed better statistical techniques to avoid overfitting and align with actual performance.
While the Rainbow Chart provides an intuitive visual framework for long-term expectations, it should not be used in isolation. Critics argue that both the Rainbow and S2F lack sufficient empirical grounding, especially when facing macroeconomic shocks such as war or trade policy changes.
Models as Guideposts, Not Oracles
Taken together, these two approaches signal that Bitcoin's maturation is approaching another inflection point. However, mathematics alone cannot capture every catalyst—liquidity shifts, regulatory stances, and investor psychology all play critical roles. Analysts recommend treating colored bands and scarcity ratios as guideposts rather than ironclad fortune-telling devices. Deviations from modeled paths may spur debate over data integrity, prompting refinements that blend traditional finance tools with emerging on-chain metrics.
In summary, both the S2F model and Rainbow Chart offer valuable structural frameworks for understanding Bitcoin's long-term value narrative. Yet, prudent investors should remain aware of external risks and use these models as part of a broader analytical toolkit.