How to Spot Bitcoin Risks with Signals
Identify and monitor risk factors in your BTC holdings with health signals.
Bitcoin Risk Overview
Bitcoin is the world's first decentralized cryptocurrency, created in 2009 by the pseudonymous Satoshi Nakamoto. It enables peer-to-peer electronic cash transactions without intermediaries like banks or governments, operating on a blockchain secured by Proof of Work mining and the SHA-256 cryptographic algorithm. With a fixed supply cap of 21 million coins and programmatic halvings every four years that reduce miner rewards, Bitcoin is designed as a deflationary digital asset often called "digit...
Understanding Bitcoin Risk Signals
Fundamentally provides 7 types of risk signals to help you monitor your Bitcoin (BTC) position. These signals combine your Focus score, market timing (CBBI), and position sizing to alert you when conditions warrant attention.
Risk Signals for Bitcoin
- Concentration Risk: Your BTC position exceeds your bet size range
- Liquidity Risk: Your position is large relative to daily trading volume
- Volatility Risk: Large price swings combined with meaningful position size
- Focus-Timing Mismatch: High Focus but unfavorable market timing
- FOMO Risk: Good timing but low Focus score
- Cleanup Candidate: Very small position with low Focus
- Overweight Poor Timing: Above bet size range during unfavorable conditions
Volatility Context
Bitcoin currently exhibits stable price action with a 24-hour volatility of 0%. Volatility Risk signals help you understand when this volatility poses a risk to your position.
How Fundamentally Monitors Bitcoin Risks
View Your Signals
7 Risk SignalsOpen the Signals page to see which risk signals are active for Bitcoin. Each signal tells you specifically what risk is present in your BTC position.
Understand Each Signal
Clear ExplanationsConcentration Risk triggers when BTC exceeds your bet size range. Volatility Risk signals you to large price swings. Focus-Timing Mismatch warns when market conditions don't favor your position.
Take Informed Action
You DecideUse the Investment Calculator to determine how much Bitcoin to rebalance if needed. Signals are informational—you decide what action to take based on your strategy.
Concentration Risk
Signals when your BTC position exceeds the bet size range based on your Focus score.
Liquidity Risk
Monitors when your Bitcoin position is large relative to daily trading volume.
Volatility Risk
Tracks BTC price swings and signals when volatility affects your position.
Timing Signals
Combines your Focus for Bitcoin with CBBI market timing to identify mismatches.
Frequently Asked Questions
Fundamentally monitors 7 risk signals for Bitcoin: Concentration Risk, Liquidity Risk, Volatility Risk, Focus-Timing Mismatch, FOMO Risk, Cleanup Candidate, and Overweight Poor Timing. These combine your BTC Focus score, position size, and market conditions.
Layer 1s like Bitcoin face technology risk, competition from other L1s, and potential centralization concerns. Your BTC risk assessment should include validator distribution, governance capture risk, and ecosystem dependency.
Monitor Bitcoin Risk Signals
Stay informed about risks in your portfolio with Fundamentally's signal system.