Bitcoin Risk Metric

Hey everyone and thanks for jumping back Into the Cryptoverse today we're going to talk About Bitcoin and we're going to be Discussing the risk metric 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 Cryptus premium at intothe Crypt.of it's just the one that I've Been accustomed using essentially since 2019 so the risk metric Val you know Varies between zero to one so zero is Historically low risk one historically High risk and the idea is that we just Look at historical price movements of Bitcoin and volatility of it and assume That we will stay within those Bounds um with the Assumption of course Of you know sort of diminishing returns Right so we've seen from one cycle to Another we've seen the risk metric go From really low risk levels to really High risk levels and one thing I like About this risk metric is that I created It in 2019 and despite the fact that It's been around so long it hasn't Broken now that doesn't mean that it Can't break but so far we have never Gone outside of the bounds that this RIS Metric suggested were theoretically Possible at any given time even during The crash in March of 2020 we bottomed Out at 0.13 risk and

In in February March time frame of 2021 we went to the 0.9 to1 rban so During the depths of the pandemic crash And during the heights of the rally in Early 2021 despite the fact that you Could have made a case for going lower Or higher we did not exceed the the the The bounds of the risk metric so back in Early 2021 when a lot of people were Calling for 300K and I was very much in The diminishing return Camp you can see That again the risk metric said back Then that we were way too heated and we Needed to cool off just like in March of 2020 the risk metric said look this is Irrational and we're probably going to Start going back up and in late 2022 we Were at low risk levels and we started Going back up after that right so my Strategy which again I mean it's not Perfect and it has changed over time I Used to buy Bitcoin up to.5 Risk back over here in this cycle but This cycle the current cycle I chose to Be a little bit more risk averse and Only buy up to 04 risk and that's just I Think as we go from one cycle to another It's natural for people in general to Become more risk averse and so because Of that I decided hey I'm still fine Buying Bitcoin but I'm only going to buy It up to 04 risk right so in ITC premium I listed my my limit orders right According to the risk Bands A lot of

Them between 0.1 to 02 risk in fact the The the buys between 0.1 to 02 risk got Filled multiple times because we sort of Filled them and then you know we went up And then we came back down and and it Filled them again um but we have been Above 04 risk for a while now right in Fact if you look at when we left the 04 RIS band um let me actually highlight All of them here you can see that we've Been above 04 risk essentially ever Since March of 2023 so I think the sort Of the idea behind all this is that it Can be challenging because you know if You do buy at low risk levels usually There's no one around to care and then Whenever the market inev goes up and you Decide hey I don't want to keep on Taking on more Risk by buying more then You know new people come in they buy and Then they laugh if you're not actively Buying but again those people weren't Necessarily here during prior periods You know and so it's natural for them to Say well why aren't you buying if the Price going up the reality is is that When Bitcoin goes into these manic Periods risk and price can go up very Quickly for long periods of time but What history shows is that whenever you Get into the 7 to one wristbands which Are shown on the chart sometime in the Not so distant future you will likely Find yourself back between .3 to 04 risk

And I I just want to go through each Example so in 2011 we went all the way Up to some high RIS bands and then a few Months later we found ourselves back Below 04 risk here in 2013 couple times Not long after going to the 0 71 risb we Found ourselves back below 04 risk same Thing in 2017 same thing in 2021 right And so once again we find ourselves in The 7 to point8 wristband history shows That usually within a few months you're Likely going to go back down to less Than 04 risk the hard part is how high Do we go before that happens because While we are at 7 to point8 risk there Is still the 08 to point9 risb and There's also the 0.9 to one risb now it Would be a mistake to assume that we Have to go to any specific risk level For instance during High interest rates QT environment of 2019 Bitcoin topped Out at 6 risk so you cannot assume that Every rally has to top at the 0.9 to1 Wristband in fact in 2011 we didn't make It to the 0 n to1 wristband but we made It there in 2013 2017 and early 2021 in 2011 we made it to the 08 to 0.9 Wristband so you can see how assuming You have to go to a RIS fan can be Devastating if you don't make it there Imagine your strategy would be to say Hey I'm going to sell everything when Bitcoin hits 0975 risk but then imagine It tops out at 097 risk you made a lot

Of money and then you just watched it All quietly go back down because Inevitably when you reach the higher Risk bands what usually happens is we go Back the other way and so what I've Learned through the years is to not say Specifically where price or risk are Going to top out but you have a plan to Navigate that no matter what happens Right so the idea is if price were to go To that rband it might mean selling a Certain amount but not everything I call It what I do Dynamic dollar cost average Now everyone is aware of dcing into the Market but there's also the idea of Dcing out of the market what I generally Do at least what I'm doing this cycle is Below point4 for risk I like to get into The market between 04 to 6 I don't do Anything except make dubious speculation Videos where I talk about what might Happen but I'm not really buying or Selling above 6 risk then I start Thinking hey we are in a manic period it Is true that price can continue to go up But at some point like likely later this Year we should see it cool off like we Normally do normally after hitting High Wristbands you can see just how quickly It comes back down so right now we are At 734 risk we have already taken out The the risk levels that we topped at in 2019 but we're still below the risk Levels that we topped out at in 2011

2013 2017 and early 2021 so there's Different strategies right there's a lot Of different strategies and in fact There's this DCA strategies uh well this Is sort of getting in but there's the um There are exit strategies tools that you Can look at and you know it could be Conservative or moderate aggressive the Hodler YOLO or seia Tranquility the seia Tranquility person is the person that Just knows where the top is and they Sell everything at at one risk right so The idea is you put in say a projected Peak let's say you think the peak is a Random I don't know just any random Number uh let's just let's just say 100K Right and then you can look at this and And sort of figure out if you were Following a constant selling strategy a Line or an exponential whether you want To sell at the beginning of the Wristband the middle or the top what That would ultimately correspond to now The reason it's hard is because usually What happens is you get into a wristband Someone sells some and then the price Goes up and then what happens is they Then Panic buy back in and then and then It tops and then it goes down So that usually doesn't work right what I have found that works is as you get Into wristbands that you become a little Bit uncomfortable with right you're like All right I like Bitcoin but it can't do

This forever one thing you could do Nonfinancial advice is to sell a small Amount so that you're kind of like Dipping your toe in the water to say Look I sold a small amount and if There's a pullback I can be sort of Happy about that because I sold some but If there's not a pullback and you Continue going up you would still want The majority of your Bitcoin right so For instance you know it could mean in The first time you sell it's only one Tenth of your Bitcoin the second time It's like two10 the third time 310 the Fourth time you know the rest of it Assuming but also potentially also Having a hoddle stack that you just hold On to no matter what now of course these Sorts of views are not liked by sort of The diamond hands crowd that that says That you only ever hold your Bitcoin and I honestly can respect that view as well History shows that Bitcoin does Generally Trend up with time but for Those that like you know sometimes Taking profits and and sort of Redistributing that Capital elsewhere Until you get back to calmer days I think these strategies can work out Relatively well so for instance even Going into the spot ETF launch the risk Level went into the wristband that I was Comfortable finally saying all right I Might take a little bit off the table

Here however I you know after after After saying that and then you know Price topped out at 48k we then went all The way back down to 39K when we went to 39K I said look guys you know while risk Is elevated we've also seen all these Prior rallies top out or bottom out Sorry these pullbacks botom out after About 20% drops and so once we went back To 39K I said you know multiple times that Could be all we get right and you know Before another rally going into the Having because this has been very much a A narrative driven thing where it just Seems like we're just chasing whatever The next narrative is whether it's the Spot ETF or the having or you know maybe The eth ETF or the E the merge by eth it Just seems like we we're chasing one Thing after Another and so you know that's just sort Of one take on it is look we went up to A high risk level and then after that 6 To7 wristband that was hit we actually Dropped back down right after after Getting there we actually dropped back Down a little bit into some some lower Risk levels um and so I I just want to Sort of high you know continue to Highlight that look when you go into Highrisk Bands it can go on for weeks if not Months historically sometime not too

Long after that you find yourself once Again at a lower risk level but good Luck convincing anyone of that during Any of these prior Peaks right good luck Convincing anyone of that when I tried Convincing people that in April of 2021 Because when we were you know we had Already hit 0.9 to1 risk and I said look We're likely going to have a summer lull People didn't like that right they Really it was 300K right there was 300K Or you're the enemy type thing um and Then we ultimately went back down to Below 04 Risk and now we've only just started to Hit the 7 to point8 risk band and so it Sort of raises the question well how Long can we stay there how long can we Stay there if you look at 2019 when we Hit 6 to 7 we stayed there for a few Weeks often on right and we we printed You know um maybe eight eight Dots here In the 6 to 7 wristband but we also Spent a lot more time in those levels as Well it maybe some lower risk levels Just sort of chopping around so that Time we weren't there for very long but Like in 2020 late 2020 and early 2021 in 2017 and even some in 2013 we were there For weeks if not months one thing to Look at is to maybe go look at the Amount of time we spend in the Wristbands right if you look at the time We spent in wristbands out of all of

Bitcoin's price history we've only been In the 7 to point8 wristband for 131 Days between 08 to 0.9 only 80 days and Between 0.9 to 1 only 18 days so history Shows if you go look at it as a percent Percentage that's 2.65% 1.62 and then 36 So if you just add these up you know if You add up 2.6 to 1.6 that's going to Get you to about 4 point uh 4.2 or so And then if you add in another point I Mean you're looking at maybe four and a Half% of the time you're at the 7 risk Banner higher right only only about Let's just say 5% of the time we are at Periods where the market is this manic Only about 5% of the Time that doesn't doesn't mean it can't Go up right it it doesn't mean that but It means having a strategy in place is Likely a good thing and so rather than You know look there's always a thousand Things to worry about right at any given Point and and I talk about a lot of Things right I mean it's a YouTube Channel I'm not just going to talk about The risk metric every single day right But whether you want to talk about the Contagion in 2022 or the the yield curve That's going to have some implications At some point whatever it might be There's always something to think about I don't trade any of that stuff right I Mean I just look at at the risk level And say look if we drop to below 04 risk

Then I would be a buyer if we go up to Much higher risk levels and as we you Know Venture into that then I probably Would want to sell into it some it's not You know anti- Bitcoin to sell into Parabolic rallies and it's you know it's Okay I think to buy when you go to low Risk levels it's just that it's Investing and and the market tends to Not just go to say what a fair value is It tends to get to extreme fear to Extreme greed and back and forth and Whenever we go up we feel like we can Never go down and whenever we go down it Feels like we can never go back up so What I would say is rather than trying To predict what Happens just say if this then that right Like if it hits my risk level that I'm Interested in selling at then I might Start to offload some if it doesn't then I have to be okay with that and if it Goes down then I might start to buy some Typically there's it's a good idea in my Opinion to have sort of a gray region Where you're neither buying nor selling Um and just sort of letting it sit for a While uh so that you're not just like Buying below 0.5 risk or something and Selling when it goes right above it and Then sort of flip-flopping on a daily Basis I think it makes sense to have Some sort of a of a gray region when you Look at a chart like this I mean it it

Really is telling and so it sort of Raises the question well we're already In the 7 to point8 wristband now how High could theoretically go and you know What does point 4 risk correspond to Because in all these prior cases a few Months later we often found ourselves You know back in the uh you know back Going to to some of these lower risk Levels right so it is is a relevant Question to ask well if you go look at Sort of the dashboard over here with With Bitcoin and we look at the current Risk right we're at 73 risk at 72.6k now Remember these are dynamics so if you're Watching this video in in six months Months these are going to be different Right and so you'd have to look at a More recent video um but all I can say Is this is what they are today right so The highest risk today so one risk Corresponds to almost 121k 08 risk so the 08 to 0.9 wristban Is up well I guess I should say 7 to Point8 corresponds to 67k up to 83k 08 to 0.9 is 83k to 101k And then 0.9 to 1 is 101k to 121k right I have learned many many times that if It's on here it's possible what's point4 Risk 31k the reason why 31k is Interesting is because that number Should mean something to you at point For risk why is that well 31k Coincidentally is this high right it's

The summer 2023 high so what if in Sometime in the next 6 months we find Ourselves back at that Level have a plan right you know have a Plan it it it's foolish in my opinion to Be the person that sort of comes in and And and buys the top of like the 08 to One wristband or something only than to Sell in a capitulation back to a a a Prior support level right so if it plays Out like that and you go back to 04 risk Just keep in mind that number right Which again it will change now zero risk Is all the way at 12K which is kind of Funny right I mean if you think about 12K that's been a number that a lot of People have talked about as a as a Potential price Target back in 2022 my only thing that I will say is That look when you're in parabolic Rallies it's uncool to call the top Because most people are wrong when You're in bare markets or capitulations It's difficult to call the bottom Because most people are wrong that's the Reality and the closest I've even gotten To trying to sort of potentially time The top which again I'm not even G to You know stick to I'm going to just Stick to the risk level is to say I Think that there is a risk of Bitcoin USD finding a local top when alt Bitcoin Pairs break down right and the reason I Say that is because last cycle when alt

Bitcoin pairs broke down that's what Marked the top of the 2019 QT rally Right that's you know that's precisely What marked the top was when all Bitcoin Pairs broke down right there you know Sort of in the summer and so that is Something I I continue to look at but The hard part about that is like who Knows when they break down or if they Will I I think they will for reasons I've stated in many prayor videos but That's sort of the the the the my Attempt at potentially trying to call a Local top is to say look if and when all Bitcoin pair is break down I think that Could correspond to a local top not Because you know there's no other money Coming in from other places like spot ETFs or just people that are dcing into The market that want to DCA into higher Risk levels than me but just to say look The the purchasing power of altcoins When all Bitcoin pairs break down Diminishes a lot and if that's the case Then you might see a larger pullback by Bitcoin so I don't know what price that Corresponds to is the problem right if I Am right about that view which I very Well could be wrong but if I am right I Don't know if that corresponds to Bitcoin at 73k or 75k or 80k or 90k like I don't know how high Bitcoin has to go In order for all Bitcoin pairs to break Down my strategy for the last two years

Or so has just been to say Bitcoin heavy Crypto portfolio until Bitcoin dominance Gets much higher I've talked about 56% As being an area of Interest right so When we get to 56% dominance assuming That we do I think we should take a look At the market in detail just like in 2019 and say look is it going to play Out the same way or is it going to be Different in some ways it already is Different considering we put in new Highs this time and in 2019 we did not And I've said previously I think this is A combination of the 2019 QT High rate Rally and the and the other rallies Where we had new highs that happened During QE so I will continue to stick With that idea and continue to say that I do think there is a potential riskof Dynamic when all Bitcoin pairs break Down I've been saying that for a long Time but the reality is that they just Haven't broken down yet right so anytime I see altcoins pump I just think all Right well because of where we are Within the business cycle the Implication of that altcoin pump is that The liquidity from that altcoin will Eventually make its way back over to Bitcoin and be fueled for Bitcoin to Continue to Traverse the risk levels so When you think about how high can Bitcoin possibly go no one absolutely Knows like no one knows I can't tell you

I don't I have no idea where it's going To top out what I would say is we are Getting into some fairly manic times Right and history shows that that those Times can last for weeks if not months And we've already been in this phase for At least a few days right at least a few Days and it can last for a while but the Point is is at some point later this Year the market will likely cool off and Um and I think it makes sense to just Have a plan set a plan in motion so that You can follow it no matter what right You know anytime what often I see happen Is people come up with a plan and then When we get into the parabolic man that The parabolic Mania then they get into That this time is different and of Course it's no different this time now It's spot ETF and and and black rock and All that stuff and the idea is that They'll never let the price of Bitcoin Go down But guys there was the same not the same But similar narratives back in 2021 of All the institutions and stuff pouring In similar narratives in 2017 and and Even before that you know there's always Been a narrative to say why this time is Different and why the risk model the Risk metric will be broken but every Single time it ends up being a pretty Good indicator and the great thing about It is it has nothing to do with my

Opinion it has nothing to do with my Opinion about the macro or if the FED Pushes us into a recession it has Nothing to do with the unemployment rate Has nothing to do with altcoins the only Thing that the risk metric cares about Is prior volatility of Bitcoin that's All it cares about so it assumes that Everything else is baked in that doesn't Mean it has to go to the highest risk Level in every rally in 2011 it only Made it to 08 to point9 risk in 2019 it Only made it to 6 to 7 right now we're At 7 to Point8 what it does mean is that the Market is getting somewhat Manic and While it can last for a while and we Could go to higher prices than a lot of People think at some point we'll Probably see ourselves back below 04 Risk even though for some reason it Seems like it's impossible and I think The reason it can often seem like that Is when you're in these parabolic Rallies it's hard to imagine anything Different right it's it's hard to Imagine anything different but the Reality is that only a week ago Bitcoin Was at 63k and a week before that it was At 52k and just a few weeks before that it Was at 39K I mean legitimately a month And a half ago the price of Bitcoin was $39,000 it's almost doubled since

Then it's almost doubled so this is the Reason right this is this is the reason That it's hard for people to imagine it Going down is because it just goes up so Quickly and so you know whenever the Turn comes whenever all Bitcoin pairs Break down or whatever risk level we Have to go to I just want to make sure That people have a plan they have a plan Going into it you don't have to use my Wrist model I mean there's plenty of Other models that you can use this is The one I use so when you hear me Talking about the wrist metric this is What I'm referring to right this is what I'm referring to when I say I'm buying Up to point4 risk I'm referring to this Model here when I say I I start to scale Out you know o over point 6 risk this is The model that I'm referring to and you Can see like why scaling out slowly Above that level can be worthwhile but You can also see why if you sold Everything at 6 to 7 risk how with the Exception of 2019 that would have been a Very foolish thing to do because the Price continued to rally on up so the Issue is that let's say you get to0 6 to Point 7 risk and then you sell Everything and then we go up another 2x Then you might run the risk of yoloing In at the top only to then watch the Market dump back to where you previously Sold if you scale out

Slowly then you have some incentive to Want to see it drop down but you're also Incentivized to see it go up because you Only saw sold a small amount it's the Same thing like if you if you see the Price dropping and you see the risk Level dropping you know let's say you Buy some at point4 risk you know you you Probably don't want to someone to go all In at 0 four risk because what happens If it goes to point three Risk or0 2 Risk right so it makes sense in my view Not Financial advice to have a strategy Based on something that is not using Emotions right it's just to say look Based on historical volatility this is What could happen it has nothing to do With the opinion of every YouTuber out There including me it's just this is What could happen based on historical Volatility and I've learned over time Many many times to just respect that Right to respect that if it's if it's Part of the risk metric then it's Possible as crazy as it might sound to The upside and the Downside so that's what I use uh Remember when you're when you're in These highrisk bands historically we're Only in it for about 5% of the time that Can still be a few weeks or months Because I mean bitcoin's been around for Over a decade right but it does just go To show it's it's just a humble reminder

That manic manic parabolic rallies don't Last forever they can last for a while But they don't last forever Unfortunately right it'd be nice if the Market just went parabolic forever and Never went back down right but that's Just unfortunately not the way the Market tends to work um and so Recognizing that and saying all right if That's not the way the market Works how Does it work oh we tend to go into Parabolic manic rallies to high risk Levels and then after that we tend to Fade back to some lower risk levels While we sort of gather ourselves and And and and look to see what the next Thing's going to be so that's the way That I navigate crypto uh you can get Access to this risk metric on ITC Premium we do have the sales still going On so check that out links in the Description below or the pinned comment We also have risk metrics for other Crypto currencies as well not just Bitcoin I just mainly focus on bitcoin Because it is you know it's obviously The safest cryptocurrency in my opinion Out of all of them and also I focused Mostly on bitcoin for the last two years Because I I view it as the safest asset But also because I think we are in a Bitcoin dominance rally so not only is It the safest asset in my opinion it's Also giving pretty good returns not

Necessarily beating every altcoin but It's beating most of them and I know a Lot of people don't like to hear that But if you look at a cryptocurrency heat Map of the top 200 coins over the last Year these are their all Bitcoin pairs I Mean Bitcoin is outperformed a majority Of them I counted these up the other day And it turned out only 19.5% of these Alls in the top 200 at outperformed Bitcoin over the last year so it's easy At any given day to cherry pick an Altcoin and say well look this altcoin Is outperforming Bitcoin but the general Trend has been Bitcoin has has continued To gain market share and so because of That I focus mostly on bitcoin because Not only is Bitcoin dominance going up But Bitcoin is also the safest asset in The crypto so to maximize your risk Adjust returns I thought having a Bitcoin heavy crypto portfolio would be The way to go and so you know to Reiterate the only the only the closest I will get you know to really trying to Time anything is is just saying look if Altcoins break down on their Bitcoin Pairs like 2019 I think that could Mark A riskof signal hasn't happened yet and Then to say you know I know that you Know to to look at at the current risk Levels and to say you know and to see it At at 7 point8 risk right I know it Could theoretically go higher than that

Um because history shows that it Can history also shows like 2019 where It it doesn't have to right so again for Me it just means you know scaling out a Little bit at at some low risk levels or Sorry low higher risk levels right so Above point 6 risk scaling out a little And then scaling out more the higher you Go with the idea that you eventually um We'll see lower risk levels at the end Of the day there's no guarantee right at The end of the day there's absolutely no Guarantee in the maret market and and The narratives are are very strong at at At tops you know and if we were to go to 08 risk or 0.9 risk or something like That I have to imagine the narrative Would be that with the spot ETFs this Time will be different and that there Will not you know that that we won't see It play out the same way my guess is That whatever whenever the manic phase Is over we will see some calmer times Where then we'd speculate on on what Will be sort of the next Catalyst for The next run to to really high risk Levels so I just wanted to show the risk Metric that I use um I would encourage People to find something to use rather Than to just Panic sell bottoms and Panic buy tops might be worthwhile to Figure out something to use uh to Navigate the market 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 Cryptoverse premium at intothe Cryptoverse decom we'll see you guys Next time bye


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