Frequently Asked Questions
What 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)
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 unique ways to make them most useful to a human.
This includes accounting for the reducing nature of Bitcoin bull runs over time,
using linear regression (see example) 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
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 the 9 underlying metrics collectively indicate we are approaching the top or bottom of a Bitcoin cycle. As such, it does not predict specific prices nor dates.
Why are some individual metrics "stuck" at 0 or 100 for an extended period? Is this a bug?
One of the unique features of the CBBI algorithm is how it gives each metric's chart an upper and lower regression line. See here for an example and here for more examples.
These regression lines are used to account for diminishing returns and reduced volatility over time. Indicators will "peg" at 0 or 100 if they exceed these boundaries. This is not a bug. CBBI dynamically adjusts itself every bull run to the new peak and new lows, to recalibrate for the next market cycle.
Generally speaking, all markets experience outlier volatility, both above and below the normal, expected ranges.
If you do not feel that some metrics are contributing constructively to the CBBI score, you may disable one or more. We have included checkboxes which you may toggle on or off for each metric.
Can the CBBI "Confidence Score" go below 0 or above 100?
If enough of the underlying metrics go below zero (as interpreted by CBBI’s algorithm) then the total score can go negative. The CBBI confidence score would peg at 0 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 expected to encounter.
Likewise, if enough of the underlying metrics go above 100 (as interpreted by CBBI’s algorithm) then the total score can go above 100. The CBBI confidence score would peg at 100 in that case. As such, in theory, the CBBI score could flatline at 100 in extreme euphoric cases. This would mean the majority of the underlying metrics saw higher highs than they had expected to encounter.
Generally speaking, all markets experience outlier volatility, both above and below the norms. It is no different with Bitcoin.
If you do not feel that some metrics are contributing constructively to the CBBI score, you may disable one or more. We have included checkboxes which you may toggle on or off for each metric.
Lastly, it should be remembered that CBBI is a tool, relying on 9 quality metrics, but it is not God.
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, 2017
and 2021. As such, its designed purpose is specifically in identifying the characteristics of such tops.
It does this across 9 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).
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.
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.
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.
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 does CBBI use the first peak in 2021 ($64k) as the top, when the second peak in 2021 ($69k) was higher?
The first peak in 2021 was the technical top per the underlying metrics of the CBBI and the second peak was a sentiment top. CBBI aims to use technical indicators for its metrics. In technical analysis terms, the two peaks formed a "double top" pattern with a somewhat negligible $5k difference in price between peaks.
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