What is the CBBI Index?

The CBBI Index (full name: Colin Talks Crypto Bitcoin Bull Run Index) is an indicator designed to evaluate the stages of Bitcoin's market cycle. By analyzing multiple on-chain and technical metrics in real-time, it generates a "Confidence Score" to help investors determine whether the market is nearing a bull run peak or a bear market bottom.

How It's Calculated

The CBBI Index combines 9 key metrics (which may evolve with updates), including but not limited to:

Bitcoin Price Trends (e.g., moving average crossovers)

MVRV Ratio (Market Value to Realized Value)

RHODL Ratio (short-term vs. long-term holder ratio)

NUPL (Net Unrealized Profit/Loss)

Reserve Risk These metrics are processed with a unique weighting algorithm, producing a score from 0 to 100:

High Score (near 100): Suggests the market may be "overheated" and approaching a bull market top.

Low Score (near 0): Indicates a potential bear market bottom or undervaluation.

The score is also calibrated using methods like linear regression to account for the diminishing intensity of Bitcoin bull runs, ensuring relevance across different cycles.

Why It Matters

Spotting "Blow-Off Tops": CBBI excels at identifying sudden, parabolic price surges followed by sharp drops (e.g., 2013 and 2017 peaks), which often yield outsized returns.

Avoiding False Signals: Unlike some indicators, CBBI has avoided false top signals in certain cycles (e.g., April 2013), offering greater reliability.

Long-Term Tool: Ideal for long-term investors, it filters out short-term noise to focus on macro trends.

How to Use It

Sell Signal: Scores nearing the red zone (typically >80 or 90) may indicate an overheated market, signaling a time to take profits.

Buy Signal: Scores in the green zone (typically <20) suggest undervaluation, making it a potential buying opportunity.

Broader Market Insight: As Bitcoin often leads the crypto market, CBBI can also serve as a macro reference for assets like Ethereum.

Things to Note

Beta Phase: CBBI is still in development, and its metric mix may change, so use it with caution.

Not Investment Advice: It provides long-term trend insights, not precise price or timing predictions.

Data Updates: Scores refresh every 2 hours, with daily updates posted on the official Twitter account.

With the CBBI Index, investors can better navigate Bitcoin's bull and bear cycles, making informed decisions especially in extreme market conditions.