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)
The composite CBBI score is an average of the 11 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:
Colin answered this in the following video:
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: https://youtu.be/rYyWzk42vKU?t=1113 (timestamp 18:33)
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.
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.
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.
The CBBI algorithm updates the score on the website 6 times per day (every 4 hours).
Some individual metrics update only once per 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.
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.
In support of the crypto ecosystem, we accept only donations made in crypto. This includes stablecoins as well. For example, one can send ERC-20 stablecoins (DAI, USDC, USDT) to our Ethereum address, or the UST stabletoken on the Terra LUNA blockchain to our LUNA address. These are just two examples.
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.
Highcharts Stock, free for non-commercial:
Yes, the CBBI source code is available on GitHub: