Bitcoin Total Indicator Risk

Hey everyone and thanks for jumping back Into the cryptiverse 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 check out the Black Friday sale on into the Cryptiverse premium at into the you can find a link to That in the description below or in the Pinned comment as a reminder we have Recently launched tiers so it should Appeal to people that are looking for Various types of content Let's go ahead and jump in Over the last year during this Bitcoin Bear Market I would argue that we've Discussed A lot of different metrics but we can Group these metrics into three primary Categories one of these categories Are price metrics so these are things That only really depend on the price of Bitcoin and one of those is the Bitcoin Risk indicator that we've previously Spoken about that is only really Dependent on the price of Bitcoin but it Also depends on things like the fear and Greet index the one you're running Roi Logarithmic regression and that sort of Stuff we've also spent a lot of time Talking about the on-chain risk and that Can include things like the mvrvz score

And the pure multiple and transaction Fees and the market capture thermocap Ratio and the terminal price and the r Huddle ratios apply profit and loss Etc But we've also discussed things like Social media risk For instance the number of YouTube Subscribers to popular cryptocurrency YouTube accounts YouTube views to Popular cryptocurrency YouTube accounts Followers to cryptocurrency analysts on Twitter and then followers to exchange Cryptocurrency exchange accounts on Twitter and layer 1 accounts on Twitter Now I would say first of all that and I've said this many times before and That's all models are wrong but some are Useful and throughout 2022 this should Be abundantly clear there have been Several indicators that would have said That June was the bottom however I Refuse to call June the bottom primarily Because when you take a more holistic View of the entire Market rather than Just simply looking at a single Indicator it would still suggest right It still suggested back in June that Bitcoin could easily push lower One example is if you look at something Called you know like the hash ribbons For instance the hash ribbons Historically are you know are a good Indicator of of calling bottoms after a

Bear Market especially when you include Price momentum and they would have Suggested that the bottom was in during The summer however as I mentioned there Are several indicators that did not Suggest that and so the whole idea was Rather than depend on a single indicator To tell you what the overall risk in the Market is what if we just combine a lot Of them and create a single indicator That includes price metrics on chain Metrics And social metrics Now this way you don't put too much Weight into any single indicator but you Can also include the input from a lot of Indicators In the creation of this risk metric And what this allows us to accomplish I Think is it allows us to sort of tune Out the noise from any given indicator Like any any sep any single indicator And focus on what are they all what are They all trying to say For instance I mean if you if you put All of your weight into into a single Indicator back in June to say all right Well that would be the bottom then of Course now we're sitting at a price Lower than that so when you do that you You get a risk level when you include All of these things and the current risk On the entire asset class according to All of these indicators is 0.163 now the

Way this works is the risk score goes From zero to one and when it's at zero It's basically at the low end of of the Risk levels if it's at one it's at the High end the general idea and we've Talked about this since 2019 is that you Generally want to scale into the market At low risk and scale out of the market At high risk right that's generally the Idea scale in at low risk scale out at High risk it sounds pretty simple right But it's always actually a lot harder Than it sounds you think back to 2021 a Lot of people would have looked back and Said that the p people that bought over Here were incredibly lucky right Now you're probably starting to Understand Why the people who had gotten in earlier Sort of just rolled their eyes at those Types of comments because they did not Experience what it was like you know if If you're sitting here now and you Joined crypto in 2021 and you've lived Through 2022 and you live through a lot Of people calling June the bottom only To be disappointed you know you've Essentially experienced something very Similar to what people experienced back In 2018 but by the time it broke in 2018 What a lot of people thought was the Bottom we had another 50 50 correction Until the bottom was actually in But in terms of the time from the peak

You've experienced about about the same Thing at this point And so the whole idea again and I you Know we've talked about this many times We have videos on this type of on this Exact topic since 2019 although it Didn't include all these indicators the Whole idea is to scale into the market At low risk and scale out of the market At high risk again it's not Financial It's not Financial advice not you know I'm not a financial advisor it's just Trying to account for all of the risk in The Market at any given time okay and One thing that you've noticed you know On my channel I'm sure over over 2022 is That I've remained quite bearish right Because you know once you know once I Fully recognized that we were in a bear Market I've I've lived through so many Of these bear markets before that I just Maintained uh I don't want to call it a Pessimistic view I would say it's a more Realistic view right it's just a you Know it's a realistic view hey guys it's A bear Market it's gonna suck yes we're Gonna have counter turn rallies and yes These counter Trend rallies are gonna Probably get a lot of people to fomo Back in but the general direction of Price action in 2022 for Bitcoin right Should be down right it should be down Um based on on the prior bear markets That we've seen

Now one of the things I think is Worthwhile to consider is that you know When this is going down right when the Risk when the risk metric is going down And we're sort of going down the risk Bands and and if you're if you're say DCA into the market It can be quite difficult if you put Money in and then you just see it go Down and then you put money in again and Then you see it go down again and this Is why I've said many times before that I think 2023 will be a fairly good Accumulation year you know if you think Back to Prior Cycles you have 2019 which Arguably was a good accumulation Year Yes we went up 4X but I mean guys that Was actually not a bad time to DCA into The market because you had plenty of Time to DCA at 3K and 4K and then we Went to 14K it felt pretty good right I Mean it was like all right we're already Up 4X and we came back down but still Plenty of time to slowly get a position In the market Same thing in 2015 right basically a Full year at low risk levels and this is Why I've said many times that you need Price-based capitulation in terms of a Percent drawdown from the all-time high But you also need time-based Capitulation where after the bear market Ends you go sideways for a while and People just give up and they they don't

Care anymore because the price isn't Doing anything this is something that is Often typically needed for Bitcoin in Order to sustain another bull ride it's Just to go sideways for a while and to Say you know what the tourists are gone And we're sort of just building out a Base to ultimately make a move higher Now when I look at this and I look at The total indicator risk and and where We currently are you can see that the Current risk is 0.163 All Things Considered it's a fairly low Risk level However as history shows us it doesn't Mean we can't go lower right it doesn't Mean we can't go lower and when you Include all of these indicators every Single bear Market risk did go lower Right I mean all of them have gone lower Than where we currently set now there's A few nuances in this that we should Explain I mean you can also turn some of These indicators off if you want You can turn off the one year running Roi Which is probably a good thing to do Because just treating it as a as a Reference point that never changes might Not be the best thing to include uh but That's the the cool part about this is You can you know you can turn on and off What you think makes sense in terms of You know figuring out what the risk

Level on on the market is Um and one of the things that I I think Is worthwhile to consider is that and We've talked about this a lot too is That the real peak in this bull run Occurred back in early 2021 right early 2021 and that Is mainly where I took my profits for This last cycle right so accumulation Down here Profits up here Right that's the general idea Now this Market cycle Threw us a bunch of curveballs right we Came back down to a lower risk level and I started buying again right I started Buying again in the summer of 2021 and Then we bounced back up right Now why is this So high at 0.74 Well look at this if you turn off if you Turn off the price risk on the on-chain Risk this is what you get unfortunately We don't have social risk going back Over here because people really making Videos on on crypto back then Um not not in the same way they are Today the social risk in November Actually went back up to the 0.9 to one Wristband so right this is a red flag Right and I mean there's not you know This sort of shows that there was a ton Of social risk still still there a lot Of people were really watching the price

But there were not a really there was Not really a lot of new money coming Into the space it was just all the same People for the most part Moving money around right and putting in More money uh but not a lot not a lot of Like new money from New Market Participants coming coming into the Space Um but the social risk because people Were tuning in right like the the views Were going up like crazy uh because People that were all tuning in at the Same time at the end of 2021 were Watching the social risk went right back Up to where it was back over here we Really did not have enough time to cool Off like we did after this peak right so We came right back up and that is why When you include the on-chain risk and The price risk this level was actually Higher at about 0.74 at the secondary Peak So I think by adding all three of these Things together or including all three Of these to come up with a single risk Metric I think it's actually quite Useful because if you only looked at one It wouldn't necessarily tell you that For instance if you only looked at the Price risk or say let's say you just Looked at the price risk and the On-chain risk We're already getting pretty low right

We are already getting pretty low And You should know that we went lower in 2018 and we went lower in 2015 from Where we currently are and we went a Little bit lower in 2011. when you look At just the price risk and the on chain Risk right we went lower the last cycle Than where we currently are today you Can see the current risk right now on Both of these is 0.049 so it's pretty Low but last cycle at the bottom it went All the way down to .00932 and the cycle Before that It went all the way down to .0204 right So pretty low Pretty low But the total risk back in November just Using these two metrics doesn't actually Quite go as high but that's because the Social risk is turned off you turn it Back on and it gives a bit more of a Clearer picture as to what's actually Happening and you know if you if you Sort of take the on let's say you don't Really like the on-chain risk because You think it's dubious at best you could Bring the weight on that down to 0.5 or Something if you want you could bring it Down to point two if you want and say I Want to focus or you could even turn it Off and say I only care about the price And the social side of things and I want To see where that hits the bottom right

Because if you just look at the price Risk and the social risk This bottom over here Back in you know 2011 was it like 0.01 The bottom in 2015 was at 0.02 The bottom in 2018 Was it 0.02 And right now it's sitting at 0.216 Right so the whole idea is to try to use This indicator to get a sense of where We are within the market cycle right I Mean these Market Cycles sort of just Come and go but just try to figure out Where we are within the market cycle One of the things that I I think is Worthwhile to consider as well is if you Only look at the social risk it's Actually still relatively High Now what would make the social risk come Down right what would actually make it Come down would it be the price Not necessarily not if it's a major Capitulation You'll notice that when we see drops Oftentimes like quick drops the social Risk goes up right it goes up because Everyone wants to tune back in right It's like it's hard for people not to Want to watch a a train wreck right in Slow motion and when you have all these You know centralized platforms melting Down in the bear Market because you Don't know which ones are solvent people Want to tune in and see what's going on

But remember one thing that's important To consider markets do not usually Bottom when everyone's tuning in to Watch them they bought them on apathy Markets tend to bottom on apathy not When Everyone's Watching and asking is The bottom end and this was one of the Things I had a problem with back in June With so many people were saying that it Was the bottom and arguing about how It's the bottom because of this Indicator and that indicator but usually At Bitcoin bottoms not a whole lot of People are arguing for it you know like I still remember when I in 2018 I Thought 6K was the bottom and when we Went to 3K at that point a lot of people Have been talking about 1K right like We're gonna go to 1K uh they weren't Talking about you know us just stopping At 3K for the most part I think a lot of People still remain quite bearish Um now I continued to DCA through Because I lived through the prior bear Market and accumulation phase and I was Like wow we just had one leg lower and I Thought it had been over and that's why This year you know this year in 2022 and In the summer I refused to call it the Bottom because I'm like oh it's the same It's the same exact thing as 2018 right We we see local bottom in June we put in Higher lows going into November and then What happens in November we get a

Capitulation right it's the same is I Mean so far it's just the same exact Thing that we saw back in 2018 but if You think about it would a major Capitulation lead to the social risk Going down which would lead to this Metric putting in a potential Major Market cycle bottom it would not in fact Now if it were a slow bleed maybe it Would right like maybe people would just Give up throw on the towel and you would See it go you know the the social risk Go down but I would argue What you really need to see the social Risk go down is just time right because People are going to lose people are Going to just like give up at some point And they they might not necessarily Capitulate their position if they I mean I mean at this point it's it's really Far into the bear market right but they Might not necessarily capitulate their Position but they might stop caring About watching it right they might say Well I mean you know we've been watching This for an entire year Bitcoin has Still been in a bear market and and they Might just say I don't want to keep Watching this on a daily basis and then They start tuning out And it's when more and more people start To tune out That I think you actually have a real Case to start talking about a a market

Cycle bottom so when you look at the Risk like this I mean this is just a Price risk and a social risk you can see Where we currently are but you can also See where historic bottoms have been but Remember this is not being elevated by The price risk because if you just look At the price risk it's already Relatively low doesn't mean it can't go Lower and in fact literally every single Cycle the price risk uh except well Actually this one didn't but like I mean If you go look at 2018 the price risk Went all the way down to to the bottom Here Could we continue to go down that's Possible Right but my argument is that We really just need a little bit more Time and I I think a lot of these major Meltdowns this year have have kept People tuning in right because they they Want to see what's going on oh there's Another company Declan bankruptcy all Right time to tune in and see what People are saying about it while we have Seen that in Prior bear markets I think This bear Market it's been to a larger Extent and it's affected more people and Therefore the social risk has remained Higher than it otherwise would have if You look at the social risk back in 2018 It bottomed at the very end of the year And it bottomed when the price of Bitcoin more or less bottomed

It bottomed on apathy people gave up and They stopped caring and by the time we Saw this rally it was a disbelief rally We couldn't even believe it it was like Wait we just went from 3K to 14K we're We're getting close to the new all-time Highs you know that was sort of the the Thought so I just want people to remember here that When you look at one indicator and it's Easy I mean like people get married to All coins quite frequently even though I Constantly want them not to it can be Easy to get married to a single Indicator uh whether it be you know Logarithmic aggression bands or the fear And greed index Could it be the you know the mbrvz score Maybe you like the social stuff right The social metrics but my point is Rather than put all of your weight into One of them why not Distribute the weights and say all right I want a little bit of Knowledge from a Lot of these different indicators but I Don't want any indicator to tell me what I have to do right and so that that's Ultimately the the goal of this Indicator and again I mean if you Include all of them We're still at a you know at a Relatively High uh or sorry we're still At a relatively low risk level history Shows us that we could in fact uh go

Lower especially if the social risk Starts to come back down so if you guys Like the content make sure you subscribe To the channel give the video a thumbs Up and again check out the Black Friday Sale on into the crypto versus premium At into the the last thing I want to Say before we go and I've I've said this Before is you can use this type of thing To figure out you know various DCA Strategies and whatnot but anyways thank You guys for tuning in I will see you Guys next time bye


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