CollinTalksCrypto Bitcoin Bull Run Index (CBBI)
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Collintalkscrypto.comCollin built an index, CollinTalksCrypto Bitcoin Bull Run Index (CBBI). This index is a combination of 9 other metrics:
- Pi Cycle Top Indicator
- RUPL /NUPL
- RHODL
- Puel Multiple
- 2 Year Moving Average
- Bitcoin Trolololo Trend Line
- MCRV Z-Score
- Reserve Risk
- Woobull Top Caps vs CVDD
In my opinion, the index is not too good to find peaks because at peak of 2021, if we apply past CBBIs for 2014 and 2017 bull runs and peaks, we will fail. In 2021, CBBI is only 84 which is lower than other peaks in 2014 and 2017 that are all higher than 90. So if we waited for CBBI to cross 90 to take profit, we would have missed chance to take profit with price about $60,000 and higher.
The index looks better if we apply it to find bottoms. In 2015 and 2018 bear markets, the CBBI fell to 2 and 1 and in 2022, in November, it fell to 2 too. It does not point that a bottom for Bitcoin is found but it is another metric to help us being more confident with Dollar Cost Averaging and HODL.
The CBBI is a Bitcoin index that utilizes advanced, real-time analysis of 9 metrics to help us understand what stage of the Bitcoin bull run and bear market cycles we are in. The confidence score indicates whether we are approaching the top/bottom of a blow-off Bitcoin cycle.
The CBBI has been trained on the blow-off tops of 2013 and 2017. As such, its purpose is in identifying the characteristics of a blow-off top specifically. Learn more in the FAQ.
Please see the FAQ for answers to many common questions regarding the CBBI.
FAQWhat about other cryptocurrencies?
The CBBI can be used as a leading macro indicator for other crypto-assets (such as Ethereum). This is because the broader crypto market generally follows Bitcoin's price movements.
For example, following Bitcoin's price peak of $20,000 on December 15, 2017, Ethereum and XRP (the two largest cryptocurrencies next to Bitcoin at that time) saw their peak in early January 2018, approximately 3 weeks after Bitcoin's price peak.
Watch more information on taking profits with altcoins and cryptocurrencies other than Bitcoin:
youtu.be/m_Ip3WGwiAc?t=1193 (timestamp 19:53)
Was CBBI invalidated by the 2021 Bitcoin price peaks?
CBBI is a macro blow-off top indicator (it was trained on the 2013 and 2017 blow-off top data).
As there was no blow-off top at $69k in 2021, CBBI didn't mark it as one. This was correct as per its training.
Since Bitcoin had never ended a macro cycle in a non-blow-off top prior to 2021, the blow-off-only phenomenon is an observation that was recognized later. It now seems fairly obvious in retrospect, but it took a non-blow-off top occurring to spot this.
One might call this “changing the narrative mid flight” and that would not be wrong. While we wish CBBI had been perfect from day one, the index remains in beta. It has undergone many changes over its life span including the removal and addition of different metrics. We are optimizing and learning as we go. The end goal is ossification (no more changes) to the index, but we aren't quite there yet.
Please read the FAQ section entitled "Does CBBI spot all bitcoin price tops or just blow-off tops?" for more information on blow-off tops versus non-blow-off tops and why this is the most important type of top to spot.
Does CBBI spot all bitcoin price tops or just blow-off tops?
The CBBI is a macro blow-off top indicator. It has been trained on the past blow-off tops of 2013 and 2017. As such, its designed purpose is specifically in identifying the characteristics of such tops. It does this across 10 different metrics that have each historically signalled blow-off tops.
The reason for explicitly seeking identification of a blow-off top is to maximumize profit-taking potential with minimum risk. Historically, blow-off tops have produced outsized returns (17x peak-to-peak from 2013-2017, and 37x peak-to-peak from 2011-2013).
Prior to 2021, Bitcoin had not experienced a non-blow-off top as the final peak of a major bitcoin price cycle. The $64k and $69k price peaks of 2021 were the first non-blow-off tops experienced for a major Bitcoin price cycle. As such, this phenomenon was not obvious during the initial development of CBBI. CBBI correctly indicates these as non-blow-off tops, with confidence scores well under 90.
DEFINITION OF A BLOW-OFF TOP:
CBBI defines a blow-off top as a sudden, parabolic rise in price and volume, reaching a peak briefly, followed by an equally sudden, sharp decline in price. With a blow-off top, the rate looks almost vertical, like the side of a parabola. Such a chart pattern typically indicates the opportunity for outsized gains over less "explosive" price tops. The 2013 and 2017 bitcoin peaks are examples of the magnitude of such tops.
Non-blow-off tops (such as the $64k and $69k price peaks of 2021), while still significant bitcoin events, may not offer such high returns. Thus they offer less profit and increased risk due to the lack of such outsized gains when profit taking.
How is the CBBI confidence score formed?
The composite CBBI score is an average of the 9 metrics, each of which is interpreted by the CBBI engine in various unique ways to make them most useful to a human. This includes accounting for the reducing nature of Bitcoin bull runs overtime, using linear regression across the peaks and valleys of the individual metric charts.
For the exact implementation, you are free to examine the CBBI source code:
github.com/Zaczero/CBBI
Past performance is not a guarantee of future performance. Why, then, does CBBI exist?
Colin answered this in the following video:
youtu.be/9B2Oe_6bCJs
Won't people "front-run" the price if everyone is trading using the CBBI?
This could be asked of any index or technical analysis price-charting method.
It's true that some people may try to front-run this index and close their position earlier, but it can also be true the contrary, and if the index signals top but the price doesn't stop, many of the people that closed too much early will buy at much higher prices pushing the price even further than predicted.
At least currently, only a small percentage of people globally hold Bitcoin and a much smaller subset of those people know of the CBBI. Thus its effect is minimal.
Also, watch this video segment where Colin explains another factor about why "front-running" is not an issue: youtu.be/rYyWzk42vKU?t=1113 (timestamp 18:33)
Is CBBI able to predict the price or the date of a Bitcoin peak or bottom?
The CBBI is time-independent and price-independent. It simply indicates whether it believes we are approaching the top/bottom of a Bitcoin cycle. As such, it does not predict prices nor dates.
When should I buy or sell Bitcoin based on CBBI?
CBBI is not investment advice. As such, it does not make any recommendation about when to buy or sell Bitcoin nor any other asset.
Colin has described his cash-out plan (in various videos and social media posts) as it relates to the CBBI. Please note that this is his personal opinion and is not to be construed as financial advice.
Are the metrics in CBBI finalized?
The CBBI is in beta. As such, metrics are subject to change. The goal is the ossification of the metrics in the index. Once the bull run is over and we have reached the next bear market bottom, it will become more apparent which metrics accurately predict peaks and valleys. At that time, it is hoped that the metrics can be made more permanent. That being said, we will always lean in favor of the index's accuracy over the metrics' permanency.
Also, it is worth noting that if at any time a metric is added or removed from the index, the entire CBBI history reflects this change. In this way, the CBBI history is always an apples-to-apples comparison when comparing past Bitcoin price cycles, given the current set of CBBI metrics.
How often does CBBI.info site update the metrics?
The CBBI data gets refreshed every 2 hours. Some metrics update only once a day, while others update more frequently.
The official CBBI Twitter bot posts the confidence score once a day (around 7 AM EST) so that the bot does not spam one's feed.
Why is there sometimes a 1-2 point change in the CBBI score a few days later?
Outdated answer: Google Trends tends to adjust their results within the last week. After that, the data remains constant. This volatility sometimes has a slight impact on the past CBBI scores.
Can CBBI go below zero?
If enough of the individual, underlying metrics go below zero (as interpreted by CBBI’s algorithm) then the total score can go negative. The CBBI confidence score would display zero in that case. As such, in theory, the CBBI score could flatline at zero in extreme undervalued cases. This would mean the majority of the underlying metrics saw lower lows than they had ever expected to encounter.
Note that none of CBBI's metrics have a recession or depression factored in, as they have never experienced one before 2022. It is the opinion of CBBI's author that such a macro economic environment could negatively affect Bitcoin’s prices more than has been seen in standard bitcoin bear markets when no such macro condition had been present.
Do you accept donations in fiat (dollars, euro)?
In support of the crypto ecosystem, we ONLY accept donations made in cryptocurrency. This includes stablecoins too. For example, one can send ERC-20 tokens (USDT, BUSD, USDC, DAI) to our Ethereum address, or BEP-20 tokens to our Binance Smart Chain address. We have full control over the private keys, so no token will be lost.
What happens with CBBI donations?
Each donation is split and distributed equally among the team members (50% Colin, 50% Kamil), and covers operational costs as well such as Bitcoin metric data subscriptions.
How does CBBI.info handle website analytics?
We keep your data safe from the prying eyes of Big Brother. We are using a privacy-friendly, self-hosted instance of Matomo Analytics. The data collected is anonymized and not shared with any 3rd party. If you wish to disable analytics tracking entirely, simply enable the "Do Not Track" feature in your browser:
- Google Chrome
- Mozilla Firefox
Alternatively, you can use the following form:
What charting library do you use?
Highcharts Stock, free for non-commercial:
highcharts.com/blog/products/stock
Is CBBI open source?
Yes, the CBBI source code is available on GitHub:
github.com/Zaczero/CBBI
Colin's Latest Thoughts on CBBI(regarding not being recession-proof)Their ProjectsSome articles
