@bitcoin.daily: August was Bitcoin's best month in years, and suddenly everyone forgot the ten months before it. There is a reason your brain does that, and the data says it is the most expensive habit in crypto. Recency bias, the last thing that happened feels like the thing that will keep happening. Start with the crowd's own gauge. The Fear and Greed index is a mood meter. Its correlation with the last 30 days of price is 0.70. Its correlation with the next 30 days is 0.13. It is a mirror, not a forecast. On the 649 days it read 70 or higher, the previous month had averaged +22% and the next month averaged +1.5%, the same as any random day. On the 421 days it read 20 or lower, the previous month had averaged -19% and the next month averaged +3%, higher 63% of the time. The gauge is late in both directions. The crowd feels best when the edge is gone and worst after the damage is done. Here is why the bias feels like wisdom. Outside bear markets, a month of +20% or more was followed by another green month 67% of the time, median +11%, 42 cases. Recency bias pays you in a bull market. That is exactly what makes it lethal in a bear market. Six months of +20% or more have printed inside Bitcoin's bear markets. The next month was red in 5 of 6, median -16%. Three months later, lower in 6 of 6, median -21%. Now August. +25%, the biggest month in years, inside a downtrend by structure, below 82,833. The mood gauge hit 74 on August 25, price peaked nine days later, the gauge is 63 now, and September is -1.6% so far. The bias says the show continues. Six for six says it ends. I am not immune to this and nobody is. The only cure I have found is base rates, not what happened last month but what happened the last six times this exact thing happened. That is why every call on this page ships with its sample size. Six cases is six cases, stated plainly. Comment RECENCYBIAS and I will DM you the free Recency Bias Study, the gauge graded and every big bear-market month with what followed. Follow @bitcoin.daily for the data on Bitcoin nobody else is showing you. #Bitcoin #BTC #CryptoMarkets #BitcoinAnalysis #CryptoData

137

There are no more comments for this video.

To see more videos from user @bitcoin.daily, please go to the Tikwm homepage.