Bitcoin: Running 1 Year Return On Investment

One of the #Bitcoin indicators that has not yet shown a convincing bottom is the running 1 year ROI of #Bitcoin. In this video we take a look at the 1 year ROI and make comparisons to prior bear markets. Could we see a capitulation by #Bitcoin in the coming months? What can we learn about bear market structures based on what we have sen in the past? Let me know your thoughts in the comments!

Hey everyone and thanks for jumping back into the cryptiverse today we’re going to talk about bitcoin and we’re going to be looking at the running one-year return on investment or roi if you guys like the content make sure you subscribe to the channel give the video a thumbs up and also check out into the cryptographers premium at into the where you

Get access to this chart as well as a lot of other charts now let’s go ahead and jump in so i’ve had some questions recently uh from from people asking you know there we have a lot of different indicators for bitcoin some of them suggest a bottom is in others don’t and you know someone recently asked well what are what are some of the ones that are still suggesting

The bottom might not be in and i wanted to go through one of them in this video so what you’re looking at here is the running one-year roi of bitcoin and if you can imagine we’ve talked i mean we’ve talked before about diminishing returns but you’ll also see diminishing returns on a running one euro roi basis as well you could imagine a line through these peaks that

Actually a line actually fits through these peaks up here relatively well but while the one-year roi peaks have been diminishing the actual one-year roi in terms of like the bottom has has more or less been somewhat the same okay now it doesn’t mean it’s always going to stay like that um and and you should remember that there’s a difference between measuring the

Roi as say like a running window of 365 days versus measuring it from a fixed point in time from say like the market cycle peak for instance if you were to go look at the bitcoin chart and we were to just sort of zoom out here and look at at every single bear market we know that we’ve had we’ve had diminishing returns to the upside but the losses in the bear market

Have also been somewhat diminished going from say 94 down in the first bear market to about 87 percent down in the second bear market and then to the third bear market about an 84 dropper cell and it sort of just like the question that gets asked right is is a 70 is dropped about 74 so far is a 74 drop sufficient to really bring this bear market home and i’m not

I mean personally i’m not sure that it is i i’ve been fairly vocal that we we certainly could have a lower low eventually i don’t know how long it’s going to take uh but it is it is a distinct possibility that i i think people should plan for whether it happens or not um and one of the arguments too from a you know from i mean there’s the indicators of course but

From an from another perspective this is really the first time that bitcoin is experiencing or will be experiencing a a recession yes we had a very brief one in 2020 but the fed quickly printed our way out of it this is the first time that that bitcoin is really experiencing tough economic conditions so then it makes you wonder right is a 74 drop right is this too

Big of a jump to go from 84 down last cycle from peak to to bottom to then only being 74 down from peak to bottom here here now you might notice that this has been diminishing from one cycle to another right so far it has in fact been diminishing but what hasn’t really been diminishing nearly as much is say they’re running one-year roi now the reason is because the

Reference point is not always you know say like the the exact peak right like the reference point does not always come exactly one year later in terms of the bottom and the top if you go look at say 2013 the the peak came in november but the one-year roi did not actually bottom until until january of 2015. so you can see that the reference point up here while it

Started to come back down the one-year roi was able to continue going down even though the reference point from 12 months before was actually past the market cycle peak so if you look at this chart you may notice that you can see that the one-year roi has had fairly you know has had fairly you know three fairly distinct bottoms uh the first one bottomed at around

0.163 the second one bottomed over here at 0.205 and the third one bottoms at 0.164 so we have three prior bottoms from bitcoin bear markets when looking at the one-year roi and you can see that they all bottomed at around 0.2 plus or minus the small amount right i mean like not exactly 0.2 somewhat slightly lower some didn’t quite make it down to 0.2 but they more

Or less got within within that ballpark right of around 0.2 now remember even if you do go lower uh or if you go down to those levels they historically have not been sustained for very long because of course you’re always comparing it to a year a year before but you can see right now the running one year roi on bitcoin is actually coming in at point three one one

So we’re already at point three one one it’s it’s interesting because we put this you know we’ve had this chart on the channel for a long time and once upon a time you know it seems it seems somewhat absurd to see it going down to point two but the chart always said that this is a possibility and we find ourselves in october of 2022 which is one month uh away from

From referencing the market cycle peak at 69k and we find ourselves at 0.311 and you can see that we’re seeing some type of capitulation on the running one-year roi at this point it’s not because the price of bitcoin is going down it’s just because our reference point from one year ago was going up if you think back to october mid-october you’ll remember that in

In actually in mid-october bitcoin sorry about that in mid-october bitcoin actually made a rally up to about the you know above the 60k level you can see this wick here it occurred the week of october 18th and we went to around the highest point was almost was 66 998 dollars so we went to almost what was the market cycle peak in the middle of october and you can

See on the running one year roi chart we are we are sort of are seeing that more so time based capitulation again there’s a price based capitulation there’s a time is an important component as well to bear markets and we’re seeing that similar type of capitulation in october uh you know one year after after that point so then the question is is well you know could

This hit around that 0.2 level well the the easiest way for it to go point two and by the when i say easiest i mean what is the highest the price could be where 0.2 of of or what is the highest price could be where it could actually hit point two well the way to figure that out is to go back and figure out you know or look at the exact day that bitcoin actually hit

Its peak now if you go back and look in in say november of 2021 you can see the peak actually occurred on november 10th okay so november 10th of 2021 but i should also say that the data that i’m using is only looking at at daily tops not wix so while the wick occurred on november 10th the highest daily close is is i or the highest daily price you can see here it

It opened um or it closed here on november 8th at 67 556 um and then it you know it opened it opened uh on on november 9th and and then we came down just a little bit so it would actually make more sense to say compare it to november 8th or november 9th as opposed to to the wick because um that’s what that that’s what the data will remember so we first get the

Price the highest price that we saw okay and on on the daily on the daily open uh are on the daily close it was 67 792. 67 792 so 67 792 in order to in order to find what you know i already or to look a figure out an 80 pullback if you simply go i mean we could always just quickly do the math but if you simply go look at at the running one year roi you could

Easily play with this um uh very quickly but before we do i mean let’s just go through it so uh the the the close was um or sorry sorry the high was 67 792 which was slightly above where the close was which was 67 556 so the highest point really that we’ll be comparing to on here is 67 five fifty six okay so i mean we know ten percent of this is just six you

Know 6.7 k therefore 20 percent of this would just be about 13.4 k but notice it’s 556 so really about 13.5 k or so so 13.5 k and if you go put that number in on november 8th so what we’re going to do is we’re going to go over here to our future projection and we’re going to go to november 8th and we’re going to put in a future price on november 8th of 13 500 and

You apply it and what you’ll which you’ll what you’ll see here is that it would get you to that same 0.2 level okay so if if bitcoin were to have a capitulation right in november and it went down to around 13.5 k it would actually correspond to the one-year roi hitting a fairly historic bottom now it could go lower right it couldn’t it might happen at a later time

For instance if if it plays out like 2014 and 2015 maybe maybe the actual bottom on the one-year roi is not exactly a year later if that’s the case let’s just put a future projection of let’s say the bottom actually occurs on december 8th at 13.5 well then you can see it doesn’t actually get all the way down there in order for it to get down to 0.2 on december 8th

You would have to go a bit lower let’s just try let’s try out um let’s just try out 12 5 and see what that looks like it goes down a little bit if we if we go down to say i mean i’m just going to go ahead and put 10k in and see what that looks like that that would get you there right maybe a little bit it would actually get you a little bit lower um so maybe 10-2

Would would actually get you there if it happened on no on on december 8th okay this just gives you an idea of of um you know what it would take to really see it get down to those levels based on the reference point being one year before i think it’s a pretty interesting chart i know not everyone appreciates these types of charts because it is somewhat um you

Know to some degree you’re looking at at or you might wonder what’s the point of measuring it exactly a year later it’s a good point but at the same time if you go i mean if you go say look at at the prior bear markets for bitcoin right like and i’ve showed this chart a number of times except for this first one over here they’ve lasted i mean the last two lasted

A very similar amount of time now that’s not to say that this one has to last the same amount of time it might be a little bit shorter it might be a little bit longer it you know it’s really hard to know um and in fact the 2018 bear market was actually in in time it was actually shorter than the 2014 bear market you see the 2014 one actually lasted a bit longer

Than the 2018 one right now you know you can see where we’re currently getting pretty far into the bear market but it doesn’t necessarily mean it’s over but that’s one of the reasons why i think the one-year roi is interesting is because the last two bear markets have have basically played out where the the bottom ended up being about a year later plus or minus a

Couple of months not promising anything here i mean it’s hard it’s hard to know exactly what the macro is going to look like we’ve laid out the you know sort of the conditions that we’re looking at but this is something that i think is at least worthwhile to consider that we are seeing that capitulation and and really you know as i speak or even today the the one

Year running roi is continuing to put in a new low it’s at again it’s at 0.311 and you’ve seen it we’ve watched it continue to drop all year what’s interesting is that normally when the one-year roi drops it drops relatively quickly right and it doesn’t really it doesn’t really hang around an area too long this time it actually did it looks a bit different but why

Is that well it’s because we had a double peak had the peak occurred had the only peak been say april of 2021 then the reference point would of course been april of 2022 but in april of 2022 uh you know bitcoin had just had that rally the bear market rally back up to the 200-day sma and the one-year roi was nowhere close to 0.2 so this i mean there are a lot of

Pieces of evidence to you know to show that measuring it from april the bear market could make a lot of sense from a technical perspective from the one-year roi perspective which doesn’t really care at all about about technicalities it just wants to know the max price you can see that it’s coming down more or less right on on on schedule as it normally does okay so

Look i’m not here to promise you any certain any certain price movement or anything like that and a lot of people argue i’m too deterministic on things and i try not to be but i will say you know my own experience back in 2018 i thought 6k was the bottom you know i did and i and even up until the very up until the very end right when the bottom fell out i i felt

Somewhat convinced that 6k was the bottom because we’ve been holding it for months you know i mean we’d simply have been holding 6k for for such a long period of time that it made sense to me that it was the bottom but one interesting observation that i would like to just quickly point out and maybe i’ll do another video on this is that there are some similarities

That we should at least be aware of for instance if you look at july of 2018 it was about a 20 move to the upside if you look at july of 2022 again it was about a 20 move to the upside following that 20 move we then had august which was nine percent down over here august was about 14 down then september was about six percent down this september was about three

Percent down october was about four percent down so far this october about one percent down but the exact percentages are not necessarily important what might be more important is just looking at the trend right like july gave us that counter trend rally and then we just sort of marched down right one two three where the monthlies started just marching down so

If you look at this on on say like a daily time frame it just looks like we’re going sideways and we are right but if you look at it a different way we’re actually spending a lot more time at these lower values like at the lower part of the range and not really spending nearly as much time at the upper part and if you go look at this on say like the monthly time

Frame that’s really captured in in monthly candles right i mean you can see that we marched down we had a monthly close at the prior monthly closes or at the prior you know the prior lowest monthly close the next one went down just a little bit lower if october manages to go down just a little bit lower again this was the capitulation that really woke everyone

Up and it happened in november of 2018. now the market cycle bottom occurred in december but the major drop that really woke the crypto verse back up was in november of 2018. so if you go back to the one-year roi and again as i as i said before right like if we go say just to november 10th or something um and put in a price of say 13 500 that gets you to around

That point two level uh so again it’s just something to consider um i i want you to you know remember that i’m just trying to be objective i’m not i’m not trying to to you know to push anything necessarily i’m just trying to say look this is an objective way to look at the data i wish i had considered in 2018 right like i wish i had considered the downside because

While i did save cash for this area i didn’t save i didn’t save nearly enough for it because of of my refusal to to even consider much lower prices um so anyways hopefully you guys enjoy this content i’m gonna probably make a longer video on on some of these trends over here so look look out for that but again if you guys like the content make sure you subscribe

To the channel give the video a thumbs up and remember to check out into the cryptoverse premium at into the you’ll have access to these charts we also do a lot of other stuff as well you can always just check it out for one month and figure figure out if you like it or not you can cancel if you don’t but again make sure you check it out and then

We also do have the free newsletter which you can find a link to in the description below alright guys we’ll wrap it up there i’ll see you guys next time bye

Transcribed from video
Bitcoin: Running 1 Year Return On Investment By Benjamin Cowen