📊【4.2 BitTiger Diary】ahr999/Rainbow Chart Indicators have become ineffective to a certain extent
First, let's take a look at the principles and usage of ahr999:
ahr999 = (Current Bitcoin Price / 200-Day Investment Cost) × (Current Bitcoin Price / Index Growth Valuation)
The bottom line (0.45) and investment line (0.45~1.2) are fixed thresholds:
< 0.45 → Suitable for heavy bottom buying (historical backtesting probability around 8%)
0.45-1.2 → Suitable for normal investment.
1.2 → Price is relatively high, pause or reduce positions
However, we observe that the historical peaks of the ahr999 indicator show a clear downward trend. The reason can be found in the formula: as the market value of Bitcoin increases, marginal returns decrease, leading to the peak values of ahr999 becoming lower and lower. The bottom buying alerts will occur more frequently at lower values, resulting in a significant decrease in sensitivity and accuracy.
This result directly leads to strategies that rely solely on this indicator to buy in advance. For example, now that the bottom buying area has theoretically passed, the buying intensity should increase, but in reality, compared to previous rounds, it may only just reach the investment line range. If the bullets are used up too early, when the real bottom buying area arrives, one can only stare blankly, and the psychological burden from huge losses will greatly increase. The principle of the Rainbow Chart is basically similar to that of ahr999.
So I believe that both the V2 version of the Rainbow Chart and the V1 version of ahr999 have become ineffective to some extent. Moreover, the investment line and bottom line of the Nine God Index should not just be fixed values as the market value of Bitcoin increases; they should be decreased in a certain negative proportion.
@coinglass_com
Finally, let me say this: do not become obsessed with any single indicator; it is essential to cross-validate through multiple indicators and dimensions. Relying on just one may cause you to miss out or get trapped in the entire bull and bear market✊✊
#比特虎日记 #BTC #四年周期 #熊市抄底
First, let's take a look at the principles and usage of ahr999:
ahr999 = (Current Bitcoin Price / 200-Day Investment Cost) × (Current Bitcoin Price / Index Growth Valuation)
The bottom line (0.45) and investment line (0.45~1.2) are fixed thresholds:
< 0.45 → Suitable for heavy bottom buying (historical backtesting probability around 8%)
0.45-1.2 → Suitable for normal investment.
1.2 → Price is relatively high, pause or reduce positions
However, we observe that the historical peaks of the ahr999 indicator show a clear downward trend. The reason can be found in the formula: as the market value of Bitcoin increases, marginal returns decrease, leading to the peak values of ahr999 becoming lower and lower. The bottom buying alerts will occur more frequently at lower values, resulting in a significant decrease in sensitivity and accuracy.
This result directly leads to strategies that rely solely on this indicator to buy in advance. For example, now that the bottom buying area has theoretically passed, the buying intensity should increase, but in reality, compared to previous rounds, it may only just reach the investment line range. If the bullets are used up too early, when the real bottom buying area arrives, one can only stare blankly, and the psychological burden from huge losses will greatly increase. The principle of the Rainbow Chart is basically similar to that of ahr999.
So I believe that both the V2 version of the Rainbow Chart and the V1 version of ahr999 have become ineffective to some extent. Moreover, the investment line and bottom line of the Nine God Index should not just be fixed values as the market value of Bitcoin increases; they should be decreased in a certain negative proportion.
@coinglass_com
Finally, let me say this: do not become obsessed with any single indicator; it is essential to cross-validate through multiple indicators and dimensions. Relying on just one may cause you to miss out or get trapped in the entire bull and bear market✊✊
#比特虎日记 #BTC #四年周期 #熊市抄底
