Bitcoin: Price Risk

Hey everyone and thanks for jumping back Into the cryptoverse today we're going To talk about Bitcoin and we're going to Be taking a look at the price metric Risk indicator if you guys like the Content make sure you subscribe to the Channel give the video a thumbs up and Check out the sale on into the Cryptiverse premium at into the that is going to end at The end of the month make sure you check That out lock in lower rate let's go Ahead and jump in so yesterday we spoke About the on chain risk the day before That we spoke about the social risk and So I thought it would be prudent for us To go to the price risk and the Constituents of the price risk include The Bitcoin risk metric this is that Legacy risk metric that I created back In 2019 If you're not familiar with it we Actually do have quite a few videos on It Um but I could I could just briefly pull It up right here so it's this risk Metric right here that was created back In 2019 and it actually did a fairly Good job of of calling the first Peak Here not as good at the second Peak Which is why you know why we've been Working on on developing the social risk And the on-chain risk and combining them To give us an even better overview than

We than we previously had but this is The price metric risk that also includes The classical risk metric that was Developed back in 2019 it also includes The total market cap risk so the total Market cap risk is different obviously Than just the Bitcoin risk because it Includes the entire market Capitalization of crypto so it's the Total market cap risk it looks something Like this So those are the two risk metrics that Are already included into this one We also have logarithmic regression risk For Bitcoin total market cap regression Risk for Bitcoin and the entire asset Class so when we talk about market cap Regression we're talking about the the Chart that comes from you know the Bitcoin beauty of mathematics video Series if you're not familiar with it it Looks something like this so This Might Ring a bell uh so we've actually Normalized these moves between zero and One and are are coming up with a risk Metric from the total market cap risk We're also looking at a corridor that I Created a long time ago we also include The fear and greet index as well and Also the option to turn on and off the Running one-year Roi now when you do This you get something that looks like This right so the idea is it Historically goes from low risk to high

Risk and so on and so forth and I mean You can see that There was a period in 2019 where we went From really low risk all the way up to You know in the the 0.5 to 0.6 wristband And and then we came all the way back Down to the lowest wristband again and Then back all the way up I think that There's a good chance that something Like this is going to happen again where We come back down for the same reasons Or very similar reasons is what happened In 2019 if you remember in 2019 we had Another inverted yield curve and and it Was actually at the you know once the The treasure yield Sprout on the three Month on the ten year reached its lowest Point the top the local top for Bitcoin Was actually already in once it reached Its lowest point and it was upon the Uninversion of the yield curve back then That ultimately led to say the secondary Bear market for Bitcoin before the true Bull Run that took us to new all-time Highs so I'm not exactly sure of course How high we're going to go this year on The risk metric but I would anticipate Something not that dissimilar from what We saw back in 2019 also note that 2015 Had a had a similar type similar types Of rally in terms of time But what was different about them is That they were not as extravagant it is Interesting though that you know this

Move here off the low it doesn't really Look like much but it was actually about An 80 rally off the low here regardless The price the the price symmetric risk Went from near zero all the way up to Around 0.2 or so came all the way up to Above that level and then had a final Drop in August note that if you were to Include this capitulation Wick it was Actually a double bottom with this one And it would have corresponded to coming Into this wristband again sometime in The third quarter of 2015. a very Similar thing could be said over here as Well if you were to include the Capitulation Wick that went all the way Down you can see here it only goes down To around five thousand dollars but if It did include the capitulation Wick all The way down to 3 800 it would have gone Fairly deep into the 0 to 0.1 wristband I'm still of the opinion that we will See something like that as the Pre-halving years we do tend to get Ahead of ourselves we see some type of Rally only for it to generally get faded In the second half of the year I think That's likely going to happen once again For very similar reasons that we saw in 2019 just namely we have an inverted Yield curve we have to deal with the Resolution of that yield curve and it's Upon that resolution of the yield curve That you get that final pullback before

The the bull market that is likely going To take us to new all-time highs begins But I will say One thing and I I I repeat this every Time we do a a risk metric video is that The goal No matter what right no matter what People are saying no matter you know no Matter the news headlines no matter no Matter what the idea is you come up with A plan And you stick with it no matter what Right you don't you don't get super Fearful anytime there's a a one thousand Dollar move to the downside you don't Think that you have to YOLO in every Time there's a five percent pump to the Upside the idea is if you have a steady Income and you're DCA into crypto then You pick a risk level you say all right I'm not going to DCA above this risk Level whether it's above the point one Risk level the point two point three Point four point five whatever it is Right it's up to you whatever it is you Choose a risk level and you say you know What above this risk level I don't want To DCA into crypto and then you pick Another risk level and you say all right Above this risk level I want to DCA out Of crypto right So the idea is Um you know when it comes up to these Areas way up here you slowly DCA out

Right you tune out everyone calling for 300K you tune all that stuff out and you Say well you know the risk levels at 0.9 It's probably not going to go that much Higher and that was by back in in the Sort of in the early phases 2021 we Called for a summer look because we were Looking at these wrist metrics or at Least the classical one and saying well It's at 0.94 risk and we're you know We're at 60k how can we possibly go to 300K when we're at the highest wristband When you account for diminishing returns Right I think the biggest misconception Is that people don't account for Diminishing returns they just assume What that what happened last cycle will Happen in a future cycle uh but that is Is certainly not always the case so if You account for diminishing returns it Allows you to sort of figure out what Those higher wristbands are going to be When accounting for that from one cycle To another or as a function of time so Again right now the total price metric Risk is at 0.341 In the grand scheme of things it's not a Super high risk level but also we should Note that in Pre having years we tend to To revisit some of the lower levels Right you can see that happen in 2015 it Also happened it didn't really happen in 2019 I mean it sort of did we can't we Fell back in to you know less than 0.2

Risk by the end of the year but really The actual massive capitulation occurred In early 2020 Just before in fact the the Bitcoin Having so about two months before the Bitcoin having is when this capitulation Occurred that took us back down to that Lower wristband so if something like This were to play out let's say in the Latter half of this year or early next Year I do think that would be sort of The the final window to establish your Positions before before we go into you Know into the next having and into the Next period of quantitative easing and And lower interest rates and so on and So forth that I think is ultimately what You're looking for and until we get the Resolution of that it's hard to know you Know exactly where where the altcoin Market is going to end up typically once Bitcoin falls back in in the latter half Of the prehabbing Year all coins get Crushed and you know we've seen this Time and time again literally you know Generally people don't want to believe It because you know they're all coins The next next best thing but the real Reality is yes while all coins can go up Some in the prehabbing year mostly Because they are being pulled up Kicking And Screaming because of what Bitcoin USD is doing when when Bitcoin falls Back in that's where you see the altcoin

Market Get Wrecked even more and so That's that's an example of how Bitcoin Dropping back down to even a higher low Or a double bottom could could lead to All coins actually putting in lower lows Right If you look around at crypto I mean you Know again the dominance of Bitcoins Moving higher Bitcoin USD is is Relatively a lot stronger than the Altcoin market and and so you have to Imagine what will happen if we do repeat What happened in 2019 or if we do repeat What happened in 2015 or if it's some Combination of the two right it's Probably going to be a combination of The two we there's a good chance we're Not going to go all the way up to say Like point six something 0.65 risk which I think is ultimately what we hit here At the top you can see it doesn't Actually include the the wick that went To 14K if you include the wick to win The wick that went to 14K we actually Went to around 0.65 risk on on sort of An hourly time frame In 2015 we didn't go up nearly as high So it's probably going to be somewhere In between these two right where it's Not I mean obviously we've already gone Higher than this but it probably won't Go as high as this and and then we come Back we fall back in second half of the Year get that one final scare in Q3 or

Q4 and and then we are likely Off to the Races for you know for sort of the next Next more sustained move in crypto that I think could theoretically take us to New Highs but until then I think it's It's worthwhile for me to at least Consider that this prehabbing year will Be on will will not be different than The other ones and it will likely play Out In a very similar Manner and perhaps 2019 of course is a worthwhile Comparison simply because we also have An inverted yield curve do note though That this one is much more inverted than The one we had back then and we are Dealing with different things and what We were dealing with back then of course Inflation is an issue today which wasn't An issue back then Um and and of course there's there's Several other other factors as well at Play so Again the idea is a a dynamic DCA Strategy at low risk levels to to come Into the market a dynamic DCA strategy Of selling at high risk levels and you Just tune out everything else right I Mean there's there's some Merit to that Kind that type of strategy because you Don't want to spend your life just Staring at a chart hourly candle after Hourly candle after hourly candle right There is some Merit to to following a

Strategy and and just sticking with it No matter what right and if you look Closely at this chart I mean the the Risk here was pretty low even at even at 20K back in June which is why you know Which is why even back then I said look I'll buy Bitcoin I'm not going to buy Anything else because I've seen what Happens in the prehabbing years and I Know that all coins get absolutely Crushed uh dear most of them do at least On their Bitcoin pairs during the Pre-halving years so I will mainly stick With Bitcoin Again we'll still we'll still see how High it goes eventually I think this Sometime later this year you'll see it Fall back in that'll be sort of the last Window I think before the next sustained Move takes place uh within Bitcoin and Then and the crypto versus as a whole Which again will correspond to the next Bitcoin having it'll correspond likely To a shift back to quantitative easing And so on and so forth if you guys like The content make sure you subscribe to The channel give the video a thumbs up And again check out the sale on into the Cryptiverse premium at into the you can get access to This chart under certain under certain Tiers Um available on the website make sure You check that out lock and lower rate

We're gonna we're gonna end the sale at The end of the month I'll see you guys Next time bye


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