Introducing RCV: Risk Index for DCA Strategy

Bitcoin investors using the dollar-cost averaging (DCA) strategy now have a powerful risk management tool—RCV. This index uses a 60-day window of realized capitalization and market capitalization to assess the relative value of Bitcoin.

- Low risk (< 0.30): Favorable accumulation phase.

- Neutral risk (0.30 – 0.50): Balanced risk-return environment.

- High risk (> 0.50): The market may be overheating.

Normalized RCV helps assess risk by quantifying the current level of risk compared to historical benchmarks. Recently, the normalized RCV signaled high risk, warning of potential Bitcoin price decline and emphasizing the need for cautious accumulation.

RCV and normalized RCV provide a comprehensive risk management framework, offering investors insights for a long-term accumulation strategy.