Bitcoin: Using On-Chain Metrics To Identify Market Cycle Bottoms

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This chart shows the historical backtest of the on-chain risk gauge shown on the Homepage and the Indicator Dashboard. The legend allows you to toggle
between the individual risk charts that make up the total on-chain risk. Above the chart you can set the weights of the individual risk metrics and see how it changes the total on-chain risk.

A weight of 0 removes the metric from the total on-chain risk calculation and a weight of 0.5 makes it contribute 50% less.

By default this chart shows the true average of the underlying on-chain risk values. If you want to map that average back onto a 0-to-1 historical scale, you can toggle the “Re-normalize Average” option above the chart.

Usage
The historical on-chain risk metric serves as a complementary risk indicator to the original risk metric by using some of the most important on-chain metrics that we offer on our charts page. In this way you can easily check the sentiment across many important on-chain metrics, and use the charts page to dive deeper into the individual metrics.

Some individual risk charts provide a unique look to the current stage of the market as well.

For example the terminal price risk metric has so far always reached 0 at market cycle bottoms and above 0.9 for market cycle peaks (assuming the most recent significant peak was in April 2021).

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