I do not see any interaction with the price of Bitcoin. When the index points were above zero, the price rose, but several weeks ago the points were below zero, and yet the price rose.There are lags as I see and the bottom line is not to use this Bitcoin bubble index or any indicator to find exact predictive signal for what will happen in future.
This is interesting index I didnt see before, but I think it would be better to use more than one source of information to know when to exit or enter Bitcoin market.It is a supportive index. You can combine it with other indicators like Monthly RSI.
Maybe combining and monitoring this with S2F Stock-to-Flow chart would give much more accurate predictions.
Right now we are way below bubble signal.
I saw this index for the first time and I liked it a lot. Anyway, I like to follow some index like this one. Of course, I don't always stick to them, but I like to keep an eye on them... Bubble happens in the price of everything. Some things are sometimes over-demanded and therefore over-priced.I agree with. Sometimes we just want to find too many details, focus too much on accuracy but ignore a fact that no one can predict the market correctly.
Maybe combining and monitoring this with S2F Stock-to-Flow chart would give much more accurate predictions.It has been proven that the S2F Stock-to-Flow chart was broken from 2021, as the price was unable to break the upward trend above $100,000. Also, the Stock-to-Flow was giving greater value to the dates at the beginning of Bitcoin prices compared to the current prices, and it is natural for them to grow. Bitcoin is 100% easy compared to what will happen now and what will happen in the future.
Right now we are way below bubble signal.
This tool seems to be based on this GitHub project[1]. I'm unsure how they calculate the index since there is a constant number that is not explained in the formula[2]. Based on the code, they seem to use this constant, the number of active addresses, Google trend search, etc to generate the number. Maybe anyone can shed light on how this formula came to be? Since it sounds like the variables are jumbled together.A bubble in the economy occurs when an asset grows rapidly and the price explodes quickly. It is closer to what happens in four-year cycles. At the beginning of the cycle, the bubble is small, and at the end it rises strongly. Therefore, certain words are used and searched in search engines to indicate that the bubble is growing.
[1] https://github.com/aksnzhy/bitcoin-bubble-index/
[2] https://github.com/aksnzhy/bitcoin-bubble-index/blob/master/original_data/process_data.py