The BTC on chain cost risk zone model overlays on chain cost benchmarks of different calibers and coin holding groups, and uses the position relationship between prices and these cost lines to determine the market risk level. 1. Yellow line: Realized Price (RP), considered as the average turnover cost of BTC across the entire chain. In previous cycles, any price below RP was considered a bear bottom. But this cycle has failed - BTC has never fallen below this line. This also caused all those who were looking for the bottom of RP to miss out on this round of market trend. The fundamental reason is that the longer the time, the greater the "noise", which seriously deviates from the evaluation of the true market cost. I personally believe that from now on, the application value of RP will become increasingly small, and it may even be abandoned. 2. Purple line: Excluding the RP obtained by holding BTC for more than 10 years, i.e.<10y_RP; This is the more reasonable real cost. A large number of cheap chips lost in the early stages will seriously lower the cost line, and their recoverability will be better after removal. During the period of February to August this year,<10y_RP effectively supported multiple times and eventually formed a bottom. At that time, there were few people who believed and many who doubted, but looking back now, it did not disappoint us (indicated by the blue arrow). 3. Green Line: Average Cost Line of Active Chips (TMMP); This is the cost assessment of the remaining active chips after excluding exchange and miner addresses. Now it happens to be the upper edge chip concentration area of the "double anchor structure". So, this line is currently the most critical risk zone. The pullback during the period of 9/10-9/17 was based on it, and not falling below it indicates that the market sentiment is still relatively optimistic. 4. Blue line: Fair value, which is also the historical average premium level. The price of BTC above this is a bull market, but below this, it cannot be considered a comprehensive bull market. 5. Red line: Short term holder average cost (STH-RP); It is the emotional boundary between bull and bear. A bear market rebound usually has it as its ceiling, and a bull market pullback often has it as its limit. When the red line crosses the blue line, it confirms the end of the bull market (indicated by the red arrow). On the contrary, when the red line crosses the blue line, the main rising wave is about to start. This signal has never failed in previous cycles. In summary, in terms of probability, it is possible for BTC to retrace to both the green and red lines, which are within the reasonable range of the bear bull transition period. But the probability of falling back to the purple line is very small, and without the emotional impact of the super black swan, I think it is almost unlikely to happen. So, based on the prompts of this risk zone model, we can plan ahead and determine where to add positions and stop losses when making a pullback. Clear at a glance, not based on speculation or intuition. Let's explain it all at once, next time I just need to send pictures, and my friends will understand what I mean.