Bitcoin: Total Indicator Risk

Hey everyone and thanks for jumping back Into the crypto verse today we're going To talk about Bitcoin and we're going to Be discussing the total indicator 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 Holiday sale on into the crypto versus Premium at into the we Do have several several different tiers Available so make sure you check it out Let's go ahead and jump in now this is The total indicator risk for Bitcoin and As you can see it actually accounts for Various things like price metrics on Chain metrics and social metrics the Price metrics and CR include things like The Bitcoin risk score itself which We've talked about before and that's Only dependent on that it's just one Thing and it depends on the price it Also depends on the total market cap Risk logarithmic aggression uh the total Market cap progression which we talk About a lot that's the Bitcoin the Beauty of mathematics series it also Depends on other things like this Corridor that we've talked about a few Times in the fear and greed index now we Also have the on-chain risk and that's Dependent on the mbrvz score the peel Multiple the mbrv score the minor cap to Thermocap the transaction fees the Market cap to thermocap the terminal

Price and then we have a couple other Options here but right now I have them Turned off and then the social risk is Is uh created by YouTube subscribers Shown the new YouTube subscribers to Popular cryptocurrency YouTube channels YouTube views to popular cryptocurrency YouTube channels new followers to Cryptocurrency Twitter analysts new Twitter followers to to popular Twitter Or two popular exchanges on Twitter and New Twitter followers to layer ones on Twitter and when you combine all of them You get a risk metric or something like This now how did you combine combine all Of the is the question right how do you Combine all of them well there's two Ways number one A lot of these a lot of these indicators Like they oscillate right Um and and let me give you an example Right so if I were to go down and let me Find uh very very quickly let me just Find a an indicator that that is a Really great example of an oscillator And you might you might be familiar with It right it's it's just simply the um The mvrbz score okay so if I were to go Over here and find the nvrbz score what You'll notice is that it more or less Oscillates right More or less oscillates It only it tends to come down very close To similar levels of course the Peaks

Are are somewhat all over the place but The whole idea is that it oscillates Between a given range right and so what You can do is you can normalize this say Between 0 and 1 to sort of capture where It spins where this indicator spends its Time so if it's if it's all the way down Here you know at the lower end of the Range that would mean it's closer to That zero risk level as it goes higher It goes to the higher risk level of one So that's one way to look at this okay Now not all of the indicators are Oscillators some of them are like they They have the same bottom part of the Range but the top part of the range Tends to tends to go down and that would Be something like the one year Roi right Like you can see that the bottom part of The range tends to be very familiar from One cycle to another but the top part of The range decreases as time goes on and So this is not an oscillator this is This is one that the the bottom is an Oscillator where it bounces off a very Familiar level but the top tends to go Down so some indicators include Diminishing returns within the indicator Itself some don't because some of them Are just more more or less oscillators So when you do this to all of them right You can come up with a risk metric for Every single indicator between zero and One and the whole idea

When you do that is that you can then Combine them all right so you've Normalized all of them between zero and One you can then combine them all into a Single risk metric and when you do that This is what you get and we even have The ability here to sort of turn on and Off some of these some of these Different metrics right And you can see how it would affect the Actual risk So we're going to walk through this a Little bit one thing I would draw your That I would like to draw your attention To is when you look at this chart first Of all I should explain what it is right So y-axis logarithmic scale price And x-axis is obviously just time It's color coded between zero between Blue to red blue is zero risk red is one Okay now zero is not really zero of Course there's no such thing as zero Risk in crypto this is just based on a Secular bull market okay and Coincidentally right it was because this Stuff is based on a secular bull market In equities that has kept me fairly Risk-averse During 2022 Because you know while I know a lot of People were hopeful that June was going To be the bottom considering that this Metric was built out of a secular Secular bull market in equities I would

Have expected us to you know really go Down and test similar levels which we Have So when you look at this chart Again blue low risk red high risk You can kind of see how it Ebbs and Flows let's hide everything and only Look at the risk between 0 0 to 0.1 what Do you see Deep value Zone here In 2011. Right deep value it didn't mean the First time it went to this level that Was the bottom it wasn't but This was the Deep value zone for Accumulation before the next Bull Run You go to the next bear Market Deep value zones did not occur until January 13th And then it was it lasted off and on Until September of that same year We popped above that level a few times So right I would have given you plenty Of opportunities to come back in had you Not come in on the first attempt And then in 2018 and early 2019 we also Found that deep value Zone What you'll notice is that those deep Value zones do not come around that Frequently The time between the 1 and 2011 2015 I Mean this is almost 2012. this is almost 2012 when it occurred So you could argue this was about three

Years but you're talking about a little Over three years between the Deep value Zone from this bear Market to this one And then the Deep value Zone Of this accumulation phase in September Of 2015 we did not come back down to the Deep value level until December 2018. or November December 2018. so again you're Talking a little over three years Now If you look at it right so the last time We were in the Deep value Zone was February of 2019. Three years from yeah February 2019 Three years from then right so you go 2020 2021 2022 maybe add a few months Because every other one was out in a few Months I'd get you out of the summer of 2022. But you don't see that here right we Have not hit that deep value level now There's a bit of a Nuance here because This includes a lot of different things And I I feel compelled to tell you the Whole story as always If you remove the social risk It would say that we've been in the Deep Value Zone okay So this is what happens when you remove The social risk Deep value A deep value Zone a deep value Zone also March 2020 the Deep value Zone and then Again when you remove the social risk it

Would say that we've been in the Deep Value Zone basically since June okay Since June Hasn't really done a whole lot right at This point because it's just been a slow Bleed when you remove the social risk However if you remove the price risk and The on-chain risk and only look at the Social risk which was only really Developed you know somewhere over here Because we just didn't have the data for It you can see that there's not really a Few there's only a few times where it Actually it actually gave that gave that Signal right we just simply don't have Data on it back here if we did you know It would it would show that this was Lower risk it's just that it hasn't Really been it hasn't really existed for Very long right like you can see that it Doesn't really start existing until well Over here when it was when it came out We have it at pretty low pretty low risk Levels but what you'll notice in all of This is that if you remove the social Risk It says we're already in the Deep value Zone right that's what it would suggest If you add the social risk on it says We're not one way to interpret that Could just simply be we you know we Might just need a little bit more time Um it could mean a lot of things right And you might say well why is the

Socialist so important well one one Thing to consider With the social risk is it's one of the Only indicators that actually called the Second top right so it called the first Top and then here it actually went back To the 0.91 wristband on the second top Right So it's one of the few that actually Went back up to that highest wristband At the November Peak And it's coming down quickly okay it's Coming down very very quickly so I mean You know just a few days ago when we had All that recent you know news about what Happened with FTX the Socialist went Back up to 0.698 now it's all the way Back down at 0.269 so you know the Social risk is coming down quite quickly So if it just comes down a little bit More then I imagine I imagine you will See that deep value Zone Uh reached right so that's just one way To to look at the data okay You could also play around with this and If you say well maybe I don't really Like the um or maybe you want to add on The supply and profit and loss to this You could do that and kind of see how it Affects things and you can see that by Turning on and off any single indicator It doesn't really have a huge effect but When you include a whole set of Indicators it can start to have a pretty

Big effect right when you include like a Whole set of them like especially like The social risk But you can see here social is gone it Calls the second top social risk off it Doesn't really call it we only barely Get into overheated territory at like a 0.65 risk or so on on the total thing so This is what it looks like Now what I'm going to do is we're going To switch it over to the raw values so Not color coding it just looking at the Raw values so you can see where the Total risk is right now and what I see And what I've said for you know the Entire year basically Every single bear Market we eventually Got down to the lower risk models right In the first bear Market we went down to 0.0147 in the second bear Market We went down to 0.0184 and in the third bear Market we Went down to 0.0152 currently we're at 0.132 So The one way that this is going to go Down in the coming weeks is if even if The price stays constant this actually Could go down because the social risk Would continue to deteriorate right we Have to remember that if the social risk Continues to deteriorate and this is One-third social risk then the total Indicator risk will eventually come back

Down so my thesis on this is that you Know we simply you know if you look at This just getting a little bit more time We'll we'll um we'll go a long way in in Helping this socialist to come down I Think that this would have come down Quicker you know had it not been for you Know the hype behind the merge and Whatnot with ethereum and and of course The social risk went elevated again with The with the Fallout of FTX so some Things have kind of kept it elevated for A bit longer but so far you know so far It's done a pretty good job right and so Far if you go back to June the lowest The total risk went was 0.135 and Recently it went down to 0.125 you know We put in a lower low on the price and The total indicator risk followed So you know I look at this and I say all Right well to me this is a useful Indicator for like a a DCA strategy Right and and I've talked about this Before it's like Dynamic dollar cost Averaging at low risk levels I tend to Go in a bit heavier and then at higher Risk levels as we go up the wristbands I Tend to put less and less money into the Market and above a certain risk level I Stopped putting anything into the market Last cycle I stopped at 0.5 risk because Above this risk level I just simply did Not want to buy Bitcoin Of course this leads to people you know

Arguing oh well what are you doing You're not buying it and it's a bull Market but I don't regret it for a Second and even in the summer it allowed Me to buy a little bit once again right And then we came back up but I look at This indicator and I think of it as a Tool of how I can how I can DCA into the Market now the one thing you have to Consider though is when this is going Down if you start DCA as it's going down It doesn't mean that it can't just keep Going down right like you know we're Currently at the same risk level that We're you know where we were here in November 2021 and and in December of 2015 and in in September of 2011 and all Of those Examples the total indicator risk Eventually went lower right and every Single example the total indicator risk Went lower and the price also eventually Went lower as well So you know I look at this and I say Well you know you could one one way to Do it is to just DCA below a certain Risk level Another way of course if you want to get More uh aggressive right is to try to Figure out where exactly the bottom is This is a more a more difficult or Dangerous approach because you run the Risk of not getting any Bitcoin before The next bull market but I mean so far

That strategy would not have been the Worst strategy right like the total Indicator risk continues to go down Quite quickly might also be worthwhile To add a moving average to some of the Stuff and kind of see how it looks like So if you had a moving average you can You can see where we currently are And then you can see see where we Currently are in the context of all Prior bear markets so we're sort of just Out of that deep value Zone When you include the social risk again I I will be remiss if I did not remind you That if you exclude the social risk you Can see that we're already pretty low Right there were still two bear markets Though that we went lower This bear or this the most recent bull Market was was quite interesting because We had two peaks at around the same Price and and it's arguably kept the Social risk elevated longer than it Otherwise would have I think a lot more people had time to Comment up here than than they would Have in say other other cases where we Didn't really spend that much time at This new Peak we just hit a new Peak and Then we just kind of came down uh I mean This one we did have a double Peak but The other ones the other ones we really Didn't it was just one one and done Right one Peak and then it was over but

Again you can see the social risk and The total risk is in the process of Coming down as we get into that deep Value Zone if history is an indication It would suggest that is a fairly Attractive level for Bitcoin and I guess It's up to you to determine whether you Think the social risk is an important Component or not if you look at the risk Metric excluding the social risk without A moving average you can still see that Every prior bear Market eventually went Lower than where we are today right so Like look to see where we currently are The current low anyways every bear Market Went lower than where we are today even Excluding the social risk so always an Important consideration as you navigate Crypto I just want you guys to to see The risk levels for what they are and Try to figure out you know what makes The most sense for you again if you guys Like the content make sure you subscribe To the channel give the video a thumbs Up we also do have the sale on Indica Diverse premium at into the you can find a link to That in the description below or the Pinned comment we do have several Different tiers okay so you can check That out one of them's even free we have Several different tiers a lot of people Had asked about that

Um so do check that out in the Description below or the pen comment Thank you guys for tuning in make sure You subscribe and I'll see you next time Bye


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