The Bitcoin risk index has left the "green zone": what this means for the market
Analysts at the CryptoQuant platform are recording a significant shift in Bitcoin's risk dynamics. According to my analysis of on-chain data, the specialized risk index for the first cryptocurrency has confidently left the low-value zone and is now moving toward the middle range. The key signal is that the indicator has surpassed its 90-day moving average, pointing to a strengthening long-term momentum rather than a short-term spike.
How the risk index works and why it is rising
The metric is calculated as the ratio of the so-called "Delta Cap" to Bitcoin's market capitalization, adjusted by a scaling factor. Delta Cap itself represents the difference between realized capitalization (the value of all coins at their last movement price) and the average capitalization over the network's entire history. Simply put, the higher this ratio, the more expensive the market is relative to its "fair" historical baseline—and the greater the potential for a possible correction.
The current rise in the index means that Bitcoin is no longer in the same low-risk zone as at the start of the cycle. However, as I note, this is no cause for panic. Since 2018, the index's major peaks have been forming progressively lower highs. For example, during the January 2015 bottom, the indicator reached ~4.20, in December 2018 ~4.39, and during the stressful periods of June and November 2022 only ~3.37–3.40. This suggests that the market is gradually "maturing," and fixed historical thresholds cannot be mechanically interpreted as capitalization grows.
What this means for traders right now
It is important to understand: the current index value has only exited the low-risk zone and entered the middle range. This is not an overheated zone, after which major crashes typically follow. On the contrary, historically, it is the extremely high index values that have marked reversal points upward—market bottoms. Currently, there is still room for downward movement, but relying on previous thresholds of 4.0–4.4 is no longer accurate: the current reversal could occur at noticeably lower values.
My professional conclusion: exceeding the 90-day moving average is a signal of growing risk, but not a marker of a "bottom reached." The market is in a normalization phase, and investors should prepare for increased volatility without expecting a repeat of historical extremes. Keep an eye on the index's dynamics—it will be a key indicator of sentiment shifts in the coming weeks.