Bitcoin: Social Risk

Hey everyone and thanks for jumping back Into the cryptoverse today we're going To talk about Bitcoin and the social Risk 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 cryptoverse premium at Into the cryptoverse Docomo make sure you check it out and Also in the pinned comment you can get Access of course to the charts that We'll be talking about in this video and Many many more so let's go ahead and Jump in the the social risk is a way to Sort of measure retail interest in the Cryptoverse and one of the things that We've pointed out before is that during QT during tightening Cycles Etc the Social risk tends to go Down when you get to the having year the Social risk tends to start to go back up One of the reasons I think that that's The case it's not just because of the Bitcoin having although we'll never Really probably know because the the Things you have to consider with with Retail interest and the having and does The having make the difference or is it Something else it's interesting how the Having year corresponds to election Years and in election years there's Going to be pressure there's going to be Political pressure on the FED to to go To more accommodative monetary policy

And when you go to more accommodative Monetary policy leads to retail being More interested in riskier assets okay So that is one of the reasons why you'll See social risk you know Trend down and Stay relatively low and then start to Trend back up as you get further out Into say the election year and and Postelection year so right now the Social risk is coming in at 227 so still in the grand scheme it's Relatively low right in the grand scheme It's relatively low if you're unfamiliar With what you know what makes up the Social risk we're just looking at at Trends and in subscribers to various YouTube channels YouTube views on those YouTube channels and also followers to Analysts on Twitter crypto you know People that talk about crypto exchanges On Twitter and layer ones on Twitter and when you look at each and Every one of these you can come up with A risk metric for it and you can Normalize it between 0 and one assuming That from one cycle to another there Will be a higher base right a higher Base from one cycle to another so you're Counting for the fact that the the fair Value of the asset class is going up as A function of time right like we Understand that there's more people in Crypto in late 2023 than there was in 2019 and there were more in late 2019

Than there was in 2015 and More in late 2015 than there was in 2011 right so That's sort of baked in to the metric to Assume that there's a higher base each Cycle and you can combine all of Them into a total social Risk to help us understand whether Retail is coming into the market or Leaving the Market now remember last cycle the Social risk went pretty low it then Popped off the lows came back down did Not really start to move up until we got To the having year now just because the Social risk is moving up does not mean That price cannot go down in fact you Could almost argue that that's more Likely to make it happen in the short Term right because you know if if if a Lot of people get pulled back in then You know you could quickly wipe those People out to make them think that Nothing's going to happen And then the real move begins that's That's what happened last cycle could This time be different of course right But last time you know Bitcoin went up And then it bled into the end of the Prehab year and then went up in the Early part of the having year people got Sucked in it was the having it was the Next best thing you know everything was Going to go up Etc and then everything Crashed even though the social risk was

Already in an uptrend it was already in An uptrend but the market still crashed And I think that is is is the test right And and it has historically been the Test and we'll see if it happens again But that is a thing to be on the lookout For is does something like that play out But in the short term the social risk is Higher today than it was back in July so At least a positive development in the Social risk meaning that some people are Starting to look back in the crypto Verse just like they did over here right Just like they started to look back in Over here you can see there was a spike In the social risk right here up to Around 0. 2 in fact right now it's you Know just above 0.2 it then went down Put put in a higher low and then went All the way up to a social score of 372 And then came back all the way down to 0.1 and then back up to point you know 38 and then back down to point you know You can see it was forming higher highs And higher lows even though Bitcoin was Forming lower highs and lower lows it's Interesting because what you really See is that Bitcoin was forming lower Highs and lower lows during the same Period that social risk was forming Higher lows and higher highs so we had a Social Divergence right price was going Down but social interest was going Up

Okay so far what we've had is price has Been going up social interest is has Been going down now social interest is Starting to pick back Up so it'll be interesting to see how This plays out just over the next like Few months before the having is there Some type of Divergence in this or is There not Now it might be helpful to Visualize some of these Different con you know constituents of The RIS metric so YouTube views is one And I was looking at this and I'm like Well is there really an influx of new Views or not and at this point I don't Really think we can definitively say That there's an influx of new views even Though that might sound weird it doesn't Mean that it can't turn into that but so Far it hasn't really Changed and we'll talk about why the Social risk is where it is in a minute Because you might be thinking well how Could the social risk be up where it is Now if the YouTube views haven't changed Well look at the 7day moving average of YouTube views we're we're currently at Around 680,000 this is of these crypto Channels that you see down here so in The short term I mean we've gone up from The low you know from the low 400s to High 300s but it still hasn't Necessarily broken out of of this

Downtrend that we've been in it might be Better visualized with a 30day moving Average Okay so a 30-day moving average is still At this point right at this point it is Still showing lower highs and lower lows In terms of new views in the cryptoverse Again that could change right it could Set a higher high but it just hasn't Done so yet right and and until we see That you you know you can't definitively Say that the downtrend is over it could Certainly be coming to an end my Expectation is that the social risk will Start to go back up as especially as we Get out into the second half of the Having year remember over here the Social risk started to Trend Up but it didn't really Skyrocket until The very end of the having year right Which is a year from now right it didn't Really Skyrocket until the very end of It still a long ways off in in terms of When it went up last cycle that doesn't Mean that it has to wait till then this Cycle to go up you we always could see It Spike sooner than that but it is at Least an you know it is notable to say That we first started a series of higher Lows and higher highs for a while before We even saw that move come in and Initially when the higher lows and Higher highs started on social risk Price was in a

Downtrend social Divergence Okay so YouTube views doesn't really Look like it's necessarily that Different YouTube subscribers has that Changed a little bit a little bit but Still not not convincing yet right I Mean like if you look at at what's been Going on over here yes there's a you Know there's some new people coming in But is it that different from what we've Seen like maybe a little bit a little Bit I mean you can see there's a there's A little bit more color over here than There was over here if you apply like a 30-day moving average to it this is what It looks Like so again like it is a move up Still nowhere near what it was back over Here Right if you look at Twitter this is Where it can kind of get somewhat Interesting you look at followers to Various analysts on Twitter there is a little bit of a Little bit more interest now than there Has been for at least the last few Months okay you know basically the Interest that we're at today is about The same as it was back in May okay About the same as it was back in May and And back in January so you know in the Short term it's still an Uptrend still not anywhere close to what We previously

Saw layer Ones what's going on here still not Convincing right it's still not entirely Convincing that anything is Necessarily durably changed it doesn't Mean it can't right but just to look at A few examples here's ethereum right Doesn't really look that convincing yet It it's actually been putting in lower Highs since August one of the reasons Might be the ethereum Bitcoin valuation Is bleeding and people are more Interested in Bitcoin right now for Bitcoin you know it's it's kind of where It was um it's kind of where it has been You know basically for the last half Year you could look at at um Cardano still not not much of a change B&B not a whole lot not a whole lot Going on there can look at uh Cosmos and Polka Dot Litecoin Salana Near Doge Ripple right so on and so Forth so not a huge change in New Followers to layer ones on Twitter Despite you know the positive price Action I think one of the reasons is because a Lot of the positive price action has Actually come from Bitcoin you know um If you think about it like a lot of the Other chains haven't really moved a

Whole lot I mean like yes Ada is up but It's still below where it was earlier This year ethereum hasn't you know it Still hasn't taken out its prior high From earlier this year whereas Bitcoin Did it long ago polka dot yes it's up Above $5 but I mean so what I mean it Was much higher than that earlier this Year and so you can't necessarily fult People for not jumping on the bandwagon Because you know if if they've been Dcing some of these things like it Doesn't they're not necessarily in the Money Yet so not a huge change here so where Is the big change coming from because if It's not coming from followers on Twitter and if it's not really coming From new YouTube views at least again Not yet but If this is I mean again right now this Is still a lower high so if this is a Lower high how can the YouTube risk be All the way back up to 227 right it's Mostly the majority component here is Coming from followers to exchanges on Twitter that's where a lot of it is Coming from and you can see it pretty Clearly like this is a pretty large Spike recently now why is this Spike Forming so interesting question right if You take out binance it's there's still A spike there right there's still a Spike although it's not as impressive

Right it's still below where we were Just back in August but you add back in Binance you can see the spike goes a lot Further up now look at everything or Sorry look at only Binance there's been a lot of new Followers on Twitter to binance over the Last few weeks arguably because you know Some of the drama going on there and and How all that's going to resolve okay so We'll see you know we'll see what comes Of that I I don't know but one of the Main reasons the social risk is up to Where it is right now is because there's Just been a lot of new followers to some Of these exchanges right like binance is Pretty high up recently I mean it just Got about 14,000 new followers in a Single day you know I don't the last Time that happened was all the way back During the FTX Collapse so it's been it's been a long Time since we've seen you know that many New followers to binance if you look at Coinbase not a huge change really you Know which is kind of funny because I Mean the the price of the stock is up a Lot Recently but even be even though I mean Still not a huge change in terms of Twitter followers to Coinbase and we could go through the List and look at a few others and kind Of see like you know some of them are

Off their lows some of them are not um Some of them are still negative Right Um so yeah FTX of course is is just you Know still putting in negative prints For the most part sometimes it gets Positive print but still mostly negative So again a lot of the reason for this Recent move higher and the social risk Is because of new followers on Twitter And also brief surges in subscribers on YouTube and views on YouTube most Everything else hasn't really changed a Whole lot or not even convincingly put In a higher High so the social risk I think is Interesting Because it tells you whether retail is Coming in to the market or leaving so You can look at this chart over here and See all right we were putting in higher Highs and higher lows in the social Risk from December 2018 until October 2020 and then we shot up right it was a Great trend People are coming in we've only just now Set a low potentially on social risk in September so I think what we would want To see with the social risk especially If you think maybe like 6 to 12 months From now is to see a base form where You're putting in higher highs and Higher lows okay because there is a Chance here that the social risk is

Bottomed remember there are no guarant Teas with these markets last cycle even Once the social risk bottomed and even Once it got its macro higher low in in October of the prehab year we still had Uh you know some work to do in terms of You know being sure that that crypto was Really going to go into a bull rud I Mean like you know the it was still that Was tested it was very much tested over The next six months so don't let your Guard down by any stretch of the Imagination and just note that there is A little bit more interest today than There has been at least for the last Couple of months okay today the social Risk is essentially back to where it was In June okay back to where it was in June and what I will be looking for over The next several months is a series of Higher lows and higher Highs one of the things to Remember is that and I'm going to work It in is that when you think about the Social risk And Bitcoin Dominance right let me just show you This really Quick the social Risk goes down as Bitcoin dominance goes Up right even over here in 2019 the Social risk had a pretty big spike but It still eventually came back down right It it did not convincingly form higher

Lows for a while and during that entire Time dominance went up Dominance has been going up since May of 2021 higher lows which is exactly when The social risk topped Out it's kind of interesting right That's when the social was topped out is When the Bitcoin dominance bottomed Excluding Stables and So if this is a shift in the trend then It means we need to be ready for changes In in the outlook on the market coming In in the having year so in the short Term my view on dominance remains Unchanged I think the dominance of Bitcoin will go higher into the end of The year but beyond that I I think we Have to we have to start to to question If the trend will change dominance has Been in a great uptrend from 38 39% and Now it's at 53% and it's probably going To go higher before the year is over but As we get into the having Year we must open our minds to other Outcomes especially if the social risk Is starting to form higher highs and Higher lows hasn't done that yet right We we've only gotten a low and a high We'll see eventually when it comes back Down if it can form a higher low and Then another higher high and even in That environment even if it does do that Which there's no guarantees right but

Even if it does do that it still does it Mean that there's not another macro Event that that can't take crypto down Temporarily just like we had last cycle Okay so again the social risk is is an Interesting way I think to to navigate The market you can color code you know I Mean I like to color code it over Ethereum you can kind of color code Price action over the social risk and And really see up here at these Peaks Just how high the social risk was the Social risk has been relatively low for A while um but the price of ethereum has Not gone down in kind with it as it Historically has if it does if it does Get a drop and the social risk is low Just remember that that often times These markets can can find you know Significant bottoms on apathy right on Apathy so we'll see we'll see how the Social plays out in the coming in the Coming weeks in the coming months again My my view on on all of this is to Essentially Say look for a higher low and a higher High be prepared for a macro event over The next 3 to six months and and be Open-minded over the next three or six Months to thinking that there exists an Outcome where altcoins start to hold Their own a little bit more than they Have been okay but Remember sometimes before that phase

Happens the market will like go through One more cleanse like it did last cycle Will that happen this cycle it's hard to Say right it's hard to say the bond Market doesn't really seem that happy Right now and and it seems like there's A a pivot coming by the FED in in early 2024 so there's a lot of volatility that We're going to have to work out Especially in an election year where There's more uncertainty but that is Sort of the game plan for me going into Next year is look to see if social risk Is putting in higher highs and higher Lows and if the like what is the Bitcoin Dominant doing in relation to that and And and and just sort of assess the Situation as to if there is a scare in The Market does retail stay or do they just Get scared off again Because so far since May of 2021 every Time something happens they just Eventually they just get scared and and Run run the other Direction another interesting thing That's sort of different this cycle than Last cycle is that last cycle social R Bottomed in 2018 and what was going on in 2019 was a Higher low this time in 2022 the social Risk was not at the bottom it just kept Going down in 2023 so

You know we still might have to go Through the process of putting in a Macro higher low first just to get to Where we were back on this chart so you Can see there are some differences Between this cycle and last cycle in Terms of you know exactly when it Bottom so something to keep in mind also Note that you know monetary policy has Been a lot more restrictive this cycle Than it was last cycle and inflation has Been a lot higher which could explain Why people haven't been as interested in Crypto in the preh having year as they Were you know last cycle and why it's Been trending down is because the macro Is is perhaps a little bit more Bleak Than it was in in 2019 right we've had An inverted y curve for a lot longer um The risk-free rate is a lot higher so it Has made some people seek yield Elsewhere other than crypto that could Be part of the reason um but I just want People to be aware the social risk is Something that we do have on the website As well as a lot of other risk metrics Um um tons of charts thousands of charts Make sure you guys check it out we have The sale going on still links in the Description below and you can use the Cyber Monday code to get $50 off um uh Your first month or 50% off if it's the Main tier it'll be $50 but on the on the Uh the the other tiers right like 50%

Off and uh make sure you guys check that Out links in the description below we Run that sale for a little bit longer See you guys next time bye

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