Research: Bitcoin Risk Signal suggests further downside in coming weeks
Bitcoin has rallied back to retest the $21,000 resistance but the Bitcoin Risk Signal, provided by Glassnode and Swissblock technologies, hit a yearly high on Sept. 5 and is still at 87 out of 100 following today’s pump.
The Bitcoin risk signal gauges the amount of risk of a significant drawdown in Bitcoin price. The score varies between 0 and 100. Between 0 and 25 is a risky environment and above 25 is a high-risk environment. A reading of 0 indicates a shallow relative risk of a significant drawdown.
Bitcoin risk signal – 12 months Source: GlassnodeBitcoin risk signal (Source: Glassnode)
Historically, Bitcoin has led the market in terms of price direction and relative safety. However, throughout the weeks leading up to the Merge, Ethereum has taken control of the market with the industry following the price of ETH.
Over the past seven days, Bitcoin has been at 100 on the Bitcoin Risk Signal, suggesting high risk and further downside. Bitcoin did, however, fall 7.5% on September 6 while the signal was at its highest. Yet, while the score is well above the safety zone of 25, the chart suggests traders act cautiously.
Blocklight Editor at CryptoSlate
Also known as Akiba, Liam is a journalist and editor of Blocklight at CryptoSlate. He believes that decentralized ledger technology has the potential to make widespread positive change. He predicts the next 10 years will bring in a dawn of a new age of technological innovation.
Get an Edge on the Crypto Market
Become a member of CryptoSlate Edge and access our exclusive Discord community, more exclusive content and analysis.
Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.
Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.