Bitcoin On-Chain Risk

Hey everyone thanks for jumping back Into the cryptoverse today we're going To talk about Bitcoin and we're going to Be discussing the onchain risk if you Guys like the content make sure you Subscribe to the channel give the video A thumbs up and also check out the sale On into the cryptoverse premium at Intothe cryptoverse docomo ah and jump In so onchain analysis often gets a bad Reputation because a lot of onchain Analysis can often be used to sort of Paint a more Rosy picture at highs Than you know than it really is right Because you know it might say well look At all these people flooding in that's a Good thing but often times that can Mark Tops um and so I thought and we've Talked about this before you know we Have different risk metrics we have the Price risk the social risk and the Onchain risk and the onchain risk is Interesting because it includes a lot of Different things we're including the Mvrv zcore the PE multiple the mvrv risk The M the the minor cap to Thermo cap The market cap to Thermo cap uh Transaction fees terminal price risk the Um the r hodle Ratio or R hotal ratio And there's Supply and profit risk so These two I'm not actually including Right now you can see that those are Turned off we could include those but The idea is that you take each metric

You normalize prior prior results Between 0 and one prior movements Between 0 and one and rather than you Know interpreting the rather than Interpreting it how we might want to Interpret it based on what we think's Going to happen we just interpret it Based on hey this is historically what Has happened and therefore we're either At a high risk level or a low risk level And if you were to look at individual Risk scores right so like if you were to Look at the mbrb zcore risk that's where It currently is it is you know just Below 04 if you look at the P multiple Risk it's getting pretty high it's at 716 note that normally once it gets Above 7 it doesn't stay there for very Long maybe a few months at most so There's some warning signs there if you Look at the mbrv mbrv risk it's getting Relatively High um this one is is is That the minor cap thermal cap is is Just below 04 you can see that in 2019 It went all the way up to 0.5 um you Have transaction fees risk which is Basically at one it's really really high Right now um we just put out a video on Transaction fees talking about that the Risk on transaction fees is really high Suggesting that you know the market Needs to cool off at some point in the Next few weeks you have the market cap To thermocap risk which is still

Relatively low compared to the other Ones and then you have the terminal Price risk which is just below 0.5 note That in in um you know in 2019 we had a Cool off period after it went just above 6 and in 2016 we had a cool off period After it just went above 0.5 and then we Have the the our hotle ratio risk which Is still relatively low and the supply And profit risk which is actually Relatively high right it's all the way Up here at 08 risk so some of these are Getting more elevated than others um but The nice thing is that you can show all Of them and combine them into a single One called the total onchain risk and When you do that you get this chart so The total onchain risk right now is 0.55 Now how do you use this well if you like The onchain stuff then you can say all Right well if it's a low risk level I'll Buy into the market if it's a high risk Level I'll sell right so if it's between Say 0 to 04 maybe you buy if it's if It's between 04 to 6 maybe you don't do Anything and if it's above 6 maybe you Sell or maybe you're more aggressive and Maybe you buy all the way up to0 6 risk And then you start selling at 08 or Maybe you're super conservative and you Only buy below 02 risk meaning you only Buy every few years and then you just Sit on your hands for a while which Probably isn't the worst strategy right

Um so this is an interesting risk metric To use because whenever it goes to low Risk it's generally a good time to buy Whenever goes to high risk it's really Good time to sell the problem is that it Doesn't always go to the higher risk Band right like here's an example in 2019 where we sort of faded after going Up to about 6 risk right you can see it It topped out at 6 risk essentially Point like 602 risk right now it's at 055 risk so it is getting relatively Elevated and um important to keep an eye On it because if it to go up even higher Um the thing to remember with the Onchain risk is that when it's at a Relatively high level let's say above 6 It doesn't tend to stay there for more Than a few months right so I would I Would certainly want to keep an eye on This as as the market continues to Especially the onchain stuff you know Has continue to get heated you know the Price of Bitcoin hasn't moved up uh as Much as some of the risk metrics would Have you believe right like the the Transaction fee risk has moved up a lot Because transaction fees are soaring Right now um and you know it's all the Way at at a really high risk level that Actually corresponds to Prior major tops But then you look at other risk levels Like the mvz score and it's nowhere near That and so it's hard to know which one

You should wait more but if you wait Them all the same you get something Looks like this now maybe you're someone That thinks that the transaction fee Risk shouldn't be used because of Ordinals or something and you can turn That off and see that it reduces the Onchain risk down to about 0469 um perhaps you think it should be Considered but maybe only consider it Half as much as all the other ones so You include a little bit of it and maybe You want to turn on Supply and profit Risk all the way up to see where that Puts things so this is a way that you Can kind of identify what is the risk in The market and the great thing about it Is that you not it doesn't really matter What you think about what it has to do Or what you think it has to do or you Know what you you know what you're Convinced that it's going to do because Of something you read but it's just say No you know there's there's just a risk Level and it's either at a low risk Level or it's at a high risk level and If it's at a low risk that means you Might want to you know based on Historical results no guarantee of Future returns but historically it's Been a good idea to DCA in at low risk Historically it's been a good idea to DCA at high risk and again as we said With the other risk metrics that we

Talked about not too long ago it doesn't Have to be any more complicated than That right that's my strategy it always Has been it always will be at least That's my plan I DCA in Bitcoin when the Risk level is low when the risk level is High I take profits and I don't make it Any more complicated than that of course We make videos talking about potentially Where price action could go in the short Term which admittedly is often wrong but I don't trade any of that stuff right I Don't I never have I never I don't Really plan on ever doing it I just Trade when it goes to a high risk level I take some profits a low risk level I I Get into the market and that's the way I Navigate crypto it's also something that Allows me to sleep well at night because Rather than constantly predict what I Think has to happen and navigating my Portfolio based around what I think's Going to happen I just react right if The price goes up to higher risk levels I sell if it goes lower to lower risk Levels I buy I react to What happens Rather than spend a lot of time thinking About what has to happen because of what Suits my bias okay that's way I navigate Crypto that's the way I navigate Bitcoin We have dozens of risk Metric videos on This channel over the last four years it All say basically the same thing um in Terms of how I navigate crypto again

This risk metric you can find via the Website at intothe cryptoverse ccom we Are running the sale on it right now Make sure you guys check that out um you Can lock in that rate as long as you not Cancel and get access to the onchain Risk thank you guys for tuning in I'll See you next time bye


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