Bitcoin Risk Model: The Complete Guide
Alphabit's Bitcoin Risk Model combines on-chain, valuation, sentiment, and macro signals into a single 0–10 score, updated weekly, that answers one question: are current conditions historically closer to "undervalued," "neutral," or "risky"?
What the score means
Each factor is normalized against its own trailing 4-year window (a full halving cycle) rather than an all-time extreme, then combined into a weighted composite from 0 (deep-value conditions) to 10 (historically dangerous conditions). The score updates as new data arrives and maps to a zone every Sunday:
It's a risk statement about position sizing, historically calibrated — never a price prediction, and never advice about your specific situation.
The four signal families
The specific indicators inside each family, and their exact calibration, are part of the proprietary model — see the published category weights and full reasoning on the Methodology page. In general terms, each family draws on the same kind of publicly-known on-chain and cycle concepts explained in the glossary below.
How stretched Bitcoin's price is relative to measures of what holders actually paid and what the network is realizing in value. The largest single family — on-chain valuation has historically been the most reliable discriminator between cycle tops and bottoms.
How far price has run above its own longer-term trend, and where today's run-up sits against Bitcoin's shrinking cycle-over-cycle pattern of diminishing returns.
What the crowd is feeling and how price is behaving over shorter windows — confirmation and context, secondary to the two valuation families above.
Structural supply dynamics and the broader liquidity backdrop. Kept at low weight deliberately — useful context, not a reliable standalone cycle timer.
Weights shown reflect the live on-chain composite score as displayed on the Risk Model page today.
Indicators referenced in this guide
Plain-English explainers for the on-chain and cycle concepts named above — what each measures, how it's calculated, and how it's historically been read at extremes.
Honest limitations
- Weights were informed by historical data— backtest results are illustrative of the strategy's logic, not a validated track record. Weights were frozen 2026-07-09 to start a public forward record; see the performance page.
- "Extreme" is relative to the trailing 4 years, not all of history — deliberately, so Bitcoin's early extremes don't make every later cycle look artificially muted.
- This is decision support, not advice.The model quantifies historical conditions; it doesn't know your situation, and it will be wrong on individual calls.
Educational content, not financial advice. See the disclosure.