Happen[In]Crypto Reserve takes a look at the Risk On-Chain Indicator and its components. These indicators help determine whether Bitcoin (BTC) has reached a bottom or not.
What is BTC Reserve Risk?
Reserve Risk is a cyclical BTC on-chain indicator that measures long-term holder confidence relative to the current asset price. When confidence is high but price is low, reserve risk gives a low value. These times have historically presented the best risk to reward ratios.
Specifically, values below 0.002 (green) are considered to confer favorable risk to reward ratios. Conversely, those above 0.02 (red) are considered to confer harmful risk to reward ratios.
Throughout the price history of BTC, every single market cycle has reached tops, while reserve risk provides a reading above 0.02. Conversely every single bottom has reached below 0.002.
current reading
An interesting observation comes when analyzing the time taken to reach the bottom after the first reserve risk below 0.002.
- 2011: The reserve reached the bottom a month after the risk first dropped below 0.002.
- 2014Reserved risk first : 0.002 . had reached the bottom four months after crossing below
- 2019: The reserve reached the bottom a month after the risk first dropped below 0.002.
In 2022, reserve risk fell below 0.002 for the first time in early January. The current low of $35,036 was reached at the end of the month.
If a bottom has not yet been reached, it would mean that five months have passed since the reserve risk has previously decreased from 0.002. As a result, it will take the longest time for BTC to reach the bottom after such a cross.
Additionally, it is noteworthy that the reserve risk has not exceeded 0.2% since December 2017.
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