Hey everyone and thanks for jumping back Into the cryptoverse today we're going To talk about Bitcoin and we're going to Be talking about 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 Into the cryptiverse premium at into the Cryptiverse.com we do have several Different tiers available including a Free one make sure you check it out link Is in the description below or the Pinned comment In this video we're going to be Providing a seasonal update to the total Indicator risk which is something that You'll probably have seen me cover on This channel a number of times Throughout the years now I do want to Mention a couple of things I will be Addressing some common misconceptions in This video and talking about various Strategies at no point am I providing Financial advice in any way I want to be Clear about that But I just simply want to sort of Address various questions that I've seen In the comments section and just try to Try to be as transparent as I can be Okay If you're looking at this chart it Probably looks somewhat familiar and It's because we've talked about the risk Levels and the risk metric on my channel
For a long time now the constituent Parts of the risk metric have actually Changed over time if you go back and Look at some of my videos from say 2019 And 2020 when we talked about the risk Metric it was actually slightly Different back then but the premise Remains the Same and that is the general Idea to scale into the market at low Risk levels and to scale out of the Market at high risk levels there is Often a common misconception that I see Especially sort of on the public side And that is that if I'm talking about The downside risk then a lot of people Assume that that means I don't have a Position in Bitcoin But it's actually simply not true and I've been clear through the years that The way to navigate the crypto errors is Not to pretend like we know exactly Where the top or the bottom is but you Have a strategy and to carry it out over A multi-year time frame that's all we Can really do I don't think anyone's Going to give you the answers you're Looking for in terms of identically Timing the top or the bottom it always Becomes obvious of course in in Hindsight but at the time it's really Hard to call the top on the day or the Bottom on the day in any consistent Manner at least I don't claim to be able To do that and I want to be clear about
That so one of the things that I I want To talk about is there are differences Of course between this risk metric and The one we had on the channel back in 2019 and 2020 this risk metric right now That I'm showing we've actually shown a Number of times on the channel so I Don't think this is the first time but I Just want to be clear that it is not the Same one that we talked about back in 2019 Back in 2019 it only included you know Price and volatility right we only Looked at price and volatility to Determine what the risk metric was this One takes into account price risk on Chain risk and social risk so it takes Into account three different things to Be clear about every part of this risk Metric it includes the Bitcoin risk Which was this risk metric over here That we talked about in 2019 it has not Been changed it includes that risk Metric which by the way when you look at It it actually did go above the 0.9 in The 0.91 Wristband back when Bitcoin Went to you know that 50 to that 60k Level It actually made it up to about 0.94 Risk which is where I scaled out mostly During the first Peak during the last Cycle not the second Peak the first Peak That's when it went to the high risk Level so this risk metric includes that
One It also includes the total market cap Risk it also includes logarithmic Aggression the logarithmic regression For the market as a whole as well that's From the Bitcoin beauty of mathematics Series videos the corridor that I use Which is Um sort of a function of some some Various price-based metrics the fear and Greed index the MVR v z score the pure Multiple the mvrv score the minor cap to Thermocap ratio the market cap to Thermocap ratio transaction fees the Terminal price and then also some social Risk metrics like followers to exchanges On Twitter layer ones on Twitter and Analysts on Twitter and then YouTube Views and follower and new YouTube Subscribers to popular cryptocurrency YouTube channels so it accounts for all Of these things so it takes into account A lot of different metrics and so the Reason for doing so And this kind of goes back to one of the Video series that we also do which I Probably should provide a video update Soon as well is the video series where We talk about the Bulls versus the Bears And the reason why you know it's useful To use more than one indicator is Because some indicators will flash well Before other ones flash right and if you Go back to Q3 in this in on this channel
There were a lot of videos that we put Out back in June July August September And October and even November where we Talked about the dangers of assuming That June was the bottom and back then There were no shortage of people calling June the bottom and they pointed to very Specific indicators to say that it was At the bottom including things like the Hash ribbons including things like oh Well it's been a year since the all-time High if you ignore the second Peak Um as well as a number of other Indicators right plenty of indicators You could have looked at I mean the the Greed the fear and greed index was at Very low levels as well the problem is That there's always other indicators That you could have used that were a bit More conservative so rather Cherry Rather than cherry pick the indicators That we want to tell the narrative right To to sort of Define what we want to see Why don't we just include you know 15 or So different indicators normalize their Behavior between zero and one and then Make arithmetric out of them and when You do that this is what you get okay so It goes from zero to one in this case We're making zero risks be dark blue and Red is is one so zero to one at low risk You generally want to scale into the Market at high risk you generally want To scale out again not Financial advice
This is just based on historical data Which is always subject to deviate in The future so we need to be cognizant of That I want to remind you before we get too Much further because I I find myself Constantly saying this not only on my Own YouTube channel but also on on you Know the NFA live the live streams we do On Thursdays and whatnot you can talk And understand the downside risk of an Asset and still have a position in that Asset right it's I know that sounds Crazy right but that is something that You can do and and that's something that I often do no matter the price of Bitcoin whether it's 23k 20K 40K 50k 10K I'm always going to be here to talk About the downside risk right it's just Part of my nature to understand what is The downside risk at any time I can Assure you that in December 2018 and March of 2020 there were not a lot of People prepared for 50 to 60 moves the Downside it did not stop them from Happening so at any given time we need To be aware of what the downside risk is Not to say that it has to happen but to Be prepared in case it does happen okay Now over the course of the last year or So you've probably heard me say things Like the Bitcoin dominance should go Higher because I still believe that I Have just simply not gained exposure in
The altcoin market for over a year now Okay have I missed out on some pretty Great rallies in the short term yes I Missed out on the you know the the January February and March rally of 2022 I missed out on the the June July and August rally of 2022 I missed out on on Even the current rally right but the Point is for me is that I think the Dominance is going to go up so I would Rather put whatever dollars that I'm Going to put into the crypto verse I'm Simply going to put them into Bitcoin so There's the common misconception though Because I talk about the downside risk And because I put out videos like you Know what is the worst case scenario That some people might assume that I Don't own Bitcoin just want to set the Record straight that's not true I do own Some and and I I've picked up plenty of Bitcoin right plenty of it over the Years and I still have pick some up in 2022 as well and and this year okay Now Why then do we talk about the downside Risk why would I pick up Bitcoin if I Think there's a real risk that it could Go lower well that's a good question the Reason is because number of things first Of all just because it goes lower Doesn't mean that I'm going to have the Ability to capitalize on it You think back to March of 2020 you know
A lot of people waiting for sub of four Thousand dollars were granted their wish For like five minutes what happens if You were sleeping what happens if you Didn't have limit order set right a lot Of things can happen just because you Think it's going to go somewhere it Doesn't mean it it's ever going to go There and if it does it doesn't mean You're going to be able to capitalize on It which is why in this video we spent a Lot of time in 2019 and 2020 and 2020 2021 talking about Dynamic DCA okay the Whole idea is scaling into the Cryptoverse when the market is Undervalued and scaling out of the Cryptoverse when the market is Overvalued so when the risk goes between 0.4 to 0.5 this is going back to the Last cycle I would DCA a little bit When it was between 0.3 to 0.4 I would Double my DCA which is dollar cost Average when it was between 0.2 to 0.3 I Would triple it when it was between 0.1 And 0.2 quadruple it and when it was Between 0 to 0.1 it would be five times Unfortunately we never went to the 0 to 0.1 wristband in the last cycle in the Bear Market yeah we never went there so I was never able to do the 5xcca right Like I still always had some cash that I Had not put into the market because I Was I was waiting on this nebulous thing That never actually occurred it doesn't
Mean I did not have a position and the Cash that I did not put into Bitcoin Just ended up going into other things Like ethereum and the altcoin market Okay there's still plenty of money to be Made as long as you had cash to deploy In the bull market right In the same way it's useful to scale out In my opinion when things are overvalued But they can stay overvalued for a long Time now again we made it to the highest Wristband over here the 0.9 to 1 Wristband uh at the first peak in the Last bull market so going back to the Total indicator risk we're currently Sitting at 0.202 and what I'm going to Do is we're going to look at the raw Values rather than look at the Color-coded version okay right now the Lowest this risk level has gone this Cycle is 0.117 if you remember back to Q3 we put out a video on this and we Talked about the Bulls versus the Bears On the risk level you know went down to Like 0.148 or so maybe a little bit Lower 0.135 near the bottom And of course back then we said hey this Is a pretty low risk level all things Considered if you buy at you know at 1920k back in July In a few years you're probably not going To care In a few months who knows right who Knows and a few months later we talked
About how typically the Q3 rally is a Fake rally a bear Market rally and we go Put a new low in Q4 and we did so yes it Was a low risk level It did not stop us from going lower Later on it did not stop us from going Lower okay so we need to be aware of That We ended up going lower in in Q4 And again right now the current risk is 0.202 so the whole idea is to scale into The market slowly but surely when we're Undervalued and to scale out when we're Overvalued if you go back to this chart It's the same thing we always say in the Bitcoin beauty of mathematics Series Right when we're below the fair value Logarithmic regression trend line the Idea is to slowly scale into the market And when it's overvalued the idea is to Slowly scale out of the market That's the whole idea with with how I Approach the market I spend a lot of time thinking about the Downside risk mainly because I've been Burned so many times in crypto and I Want people to be aware that there's Downside risk is always going to be There no matter how sure we think we are About where the price is going so I make No apologies for it And I will continue to remind people That despite us talking about the Downside risk and despite us talking
About worst case scenarios it does not Change my long term view on bitcoin I do Think it's going to eventually head much Higher and it does not change the fact That I have a position in Bitcoin even If you think I don't okay so please be Aware that understanding the downside Risk of an asset does not equate to Whether owning that whether I own that Asset or not in fact if I if I only ask That I'm probably more likely to try to Understand what is the downside risk Because I'm either wanting to Potentially pick up more or trying to Figure out if I should skim some off if The asset is is really overheated in Terms of its risk level right now you Know even at even at 23k the risk on Bitcoin is still relatively low in the Grand scheme of things so it still could Go much higher and there still is plenty Of room for it to come down it all Depends on on you know how things play Out here over the next year if we Actually get this sort of this sweet Spot down here at these relatively lower Risk levels now from a cyclical point of View Bitcoin normally bottoms around November December January so There is at least an argument to be made That November could be the bottom right I mean this is this is something that You have to just accept right it June
Could have been the bottom I I said I Was very clear about it I was like I Don't think it's the bottom but it could Be November could be the bottom right just Like June could have been the bottom November could be and I would say There's a little bit more weight into Considering it now than there was back In June okay because from a cyclical Point of view it seems like the bear Market has run its course the main risks I think we have are regulation risk and Recession risk regulation risk I don't Really think it's going to hit Bitcoin As hard as it might hit the altcoin Market recession risk is there is a real Thing but we still might not be in a Recession for a long time could be six Months could be 12 months could be Longer right I don't know the job market Still Remains relatively strong and and The FED is likely going to keep raising Interest rates to make sure that Inflation doesn't go away which could Provide you know some headwinds to risk Assets but in general Until either inflation goes back up or The economy starts to slow down a Material way risk assets could continue To show strength so I would still look At this risk metric and say you know What in the grand scheme of things It's a low risk level so for me in the
Grand scheme of things it makes sense to Have a position okay and I've had a Position for a long time and I had a Position for all of 2022 I didn't sell All of my Bitcoin in 2021 and I still Picked up Bitcoin in 2022. I think There's always a disconnect too between The public side and the and the you know Into the cryptivist premium because on Into the crypto versus premium I'm Pretty I'm pretty open about where my You know Um you know what I'm doing and that sort Of stuff and for instance during the June capitulation I was very open that I Thought we were going to go lower Eventually but I still picked some up Back in June I had a limit order filled At around 17 6. still pretty open about That I was like look I think we're gonna Go lower but I still had a limit order Filled the reason is because I have to Admit to myself one thing and that's I Don't know exactly which way the Market's going to go even though I Thought June was not the bottom Was I willing to bet Having no Bitcoin on it no I wasn't Right and just like today we could Easily see a new low eventually am I Willing to sit on a hundred percent cash Waiting for a new low no right I'm not Majority of my portfolio is Bitcoin you Might say well why don't you get
Ethereum why don't you get more ethereum Why don't you get all coins well if you Look at history history shows us that The altcoin market still bleeds even After Bitcoin bottoms okay look at a lot Of the all coins from last cycle they Had pretty bad 2019s and 2020s when you Look at their year-to-date Roi as a Function of time many of them put in new Lows and if they didn't put it in 2019 Many of them put a new low in 2020 in March of 2020. so I still think the Dominance of Bitcoin is poised to go Much higher therefore if I think that Why would I put a lot of money in the Altcoin market because I think my risk Adjuster returns are better in Bitcoin So again the way that I choose to Navigate the market right now my crypto Portfolio is heavy Bitcoin I also am Heavy cash in case we see another Downturn note that if Bitcoin were to Put on a double bottom the altcoin Market would likely get even more Wrecked than it did the first time that Bitcoin went down to 15K you have to be Aware of that how do you take advantage Of potential scenarios that could play Out like that you have to have cash is My opinion right if I don't have cash I Can't take advantage of it I also think There's this common misconception that You're either 100 deployed into the Cryptiverse or you're not and you're
Either with us or against us That's not the way to navigate crypto in My opinion that the way to navigate it Is to sort of have especially during Sort of like a sideways accumulation Year one foot in one foot out one foot In because history shows us like 2015 And 2019 that you can get some pretty Nice rallies but one foot out in case You get another mini bear Market that Lasts three to six months like we saw in 2019 like we saw a couple times in 2015. So I think that you have the primary bear Market years of 2014 2018 and 2022 I think you have the recovery years of 2015 2019 and 2023 2015 we saw a new low 2019 we did not we have two data points One put in a new low one didn't there's A lot of people that are already Claiming they know what's going to Happen in 2023 we only have two data Points and in both cases one put in a New low one did not I'm sort of going Into this thinking hey we could put in a New low and if we do I'm gonna be ready For it and if we don't Then I'll still be it I'll just continue To DCA later this year and and Throughout a lot of this year and just Be patient wait till the next having and Hope hope we Trend up to new all-time Highs again that's how I navigate the Market it's not any more complicated
Than that please do not mistake my my Videos on managing you know or at least Discussing the downside Risk please do Not mistake that with my position in Bitcoin or my long-term view on bitcoin I think a lot of people are tired of Hearing me talking about the downside Risk and they assume that I think just Bitcoin's only ever going to go down That's not true I think we will go to Much higher prices I just think that We're in a recovery year and and like I've seen in 2019 and in 2015 people Tend to get ahead of themselves they Start talking about new all-time highs And we typically just come back down Eventually and retest the lows at the Very least or get or get somewhat close To them okay So this is uh is my general outlook on On crypto and again right now the the Current indicator risk for Bitcoin when You incorporate price risk on chain risk And social risk is 0.202 if you exclude The social risk it's obviously gone Lower right it's gone lower but it still Hasn't gone as low as it did in Prior Bear markets right Still did not go as low as it did in Prior bear markets even when you exclude The social risk this is the most common Form of criticism I've gotten from the Social risk is that well if you exclude It we've already gone down to these
Levels and it's true and that's why I Have a position in Bitcoin right but Even when you exclude the social risk we Still have not gone down to Historic Lows that we've normally seen and that's Why I have to remain somewhat Open-minded about well could that happen Later on like could it happen it could And therefore if it does I want to make Sure I'm ready for it even if it doesn't Happen right hope for the best plan for The worst the other thing that kind of Irks me a little bit I'm being completely honest right I just Want to be an open book is you know in 2015 when we bought it in January and in 2018 when we bought him in December I Don't remember you know collectively Crypto Twitter not that crypto Twitter Really existed especially in 2015 but it Did sort of exist in 2018 and and There's also YouTube as well I just Simply don't remember everyone Collectively calling the bottom which is What it feels like is happening this Time it feels like every I mean there Were some people calling the bottom in June a lot of people called the bottom In June but then an even more a larger Number of people called the bottom in in November of course everyone who called The bottom in June is more or less Calling the bottom in November as well Because
Um you know they they are probably They just you know don't want it to go Much lower but if If everyone's calling the bottom which It feels like a lot of people are I do Wonder you know is this Is it too much like is there too much Social interest right now because if you Were to go break this down and just look At the if you were to go look at the um The social risk like if we break this Down on the social risk the social risk Right now is 0.195 So it's been going lower Last cycle the market didn't bottom Until the social risk was essentially Zero So that's one reason I'm a little bit Skeptical and I I which is why I think It's it's worthwhile to to keep an open Mind about about you know will Bitcoin Eventually go to a lower price or not I Just don't know you know are there too Many people still calling the bottom for It to be the bottom I don't know I mean It's mental gymnastics to some degree And I I tend to stay away from that So just a final reminder and I I just I Feel like I have to address this just Because of all the comments that I see Not only on my YouTube channel but on Twitter and other places as well just Because we talk about the downside risk To an asset does not mean that it's not
Worth owning that asset it is nothing to Say to that it's just about we need to Understand what it is so we can better Navigate the market and if there is a Chance to buy it lower prices I would Consider that a good thing not a bad Thing because I ultimately think Bitcoin Is going to go much higher it's just a Matter of time I just view this as how Do I deploy my capital in most efficient Way possible between now and when Bitcoin makes that run to you know 100K 200k and higher that's what I want to do And that's how I'll continue to navigate The cryptos hopefully this has been Helpful in terms of in terms of coming Up with the strategy if you don't have Access to this like if you don't have um Into the crypto versus premium that's Completely fine right like just figure Out something else to go by you don't Have to use my risk metric there's Others there's other metrics out there That you can use there's plenty of them And I've often said many times as well You know you don't need you don't need Some super complicated strategy to be Successful in crypto you just need a a Constant strategy stick to it and wait And normally good things happen all Right This bear Market Is thrown us plenty of curveballs so far Probably gonna throw us you know throw
Us some more as well especially as we Get further out into 2023 in the Accumulation phase which arguably we're Already in doesn't mean we can't retest Lows put in slightly new lows you need To be prepared for all these scenarios I'll continue to follow the risk metric I will continue to get into the market At low risk levels and I will scale out Of the market at high risk levels it's Not more complicated than that even Though I will continue to talk about Both the downside risk and the upside Potential of crypto thank you guys for Tuning in make sure you subscribe give The video a thumbs up and I'll see you Guys next time bye
