This indicator is a combination of multiple on-chain, seasonality, and momentum BTC macro cycle bottom and top indicators. The BTB detects confluence of multiple indicators to select bottoms and tops of each BTC macro cycle. More detail can be seen on the BTI and BBI indicators. The BTB indicators are:
1) Cumulative Value Days Destroyed (CVDD) - The CVDD is the ratio of the cumulative value of coin days destroyed in USD and the market age (in days). When the BTC price goes below this value, BTC is generally considered to be undervalued. The bottom indicator is triggered when the BTC price is below the CVDD or above the CVDD extension. Because the "strength" of the BTC tops has decreased over the cycles, a logarithmic function for the extension was created by fitting past cycles as log extension = slope * time + intercept.
2) Net Unrealized Profit Loss (NUPL) - The NUPL measures if past transfers of BTC are currently in an unrealized profit or loss state. Historically positive or negative NUPL values indicate an over/undervaluation of the BTC network. The bottom indicator is triggered when the NUPL is below -15 and the top is triggered above an adjusted value based on decreasing "strength" of BTC tops. A decreasing linear function (trigger = slope * time + intercept) was fit to past cycle tops and used to determine overvaluation.
3) Market Value-Realized Value Z-score (MVRV-Z) - The MVRV-Z measures the value of the bitcoin network by comparing the market cap to the realized value and dividing by the standard deviation of the market cap (market cap – realized cap) / std(market cap)). The bottom indicator is triggered when the MVRVZ value is below 4 and tops are above 55.
4) Puell multiple (PUELL) - PUELL is the ratio between the daily coin issuance in USD and its 365-day moving average. This multiple helps to measure miner profitability. Extremes in PUELL may indicate tops or bottoms. The bottom indicator triggers when the PUELL is below 0.4 and top is triggered above 3.33.
5) Calendar Seasonality Index (CSI) - The CSI takes advantage of the consistency of BTC cycles. Past cycles have formed macro bottoms every four years between December and February which triggers the bottom indicator. Past cycles have formed macro tops every four years between October 21st and December 12th, triggering the top indicator.
6) Halving Seasonality Index (HSI) - Past cycles have formed macro bottoms approximately 948 days after each halving, triggering this indicator at set times, 948 +- 45 days, after each halving. Aside from the first halving, cycles have formed macro tops approximately 538 days after each halving. Therefore, this indicator triggers at 538 +- 10 days after each halving.
7) Polylog Regression (PLR) - The BTC cycle tops and bottoms were separately fit using a polynomial regression. The shape of the regression into the future was estimated and a fit was used to estimate when tops and bottoms are near. This triggers when the BTC price is inside or below the lower polylog regression channel and when the BTC price is inside or above the upper polylog regression channel.
8) Realized Price (RP) - The RP is summation of the value of each BTC when it last moved divided by the total number of BTC in circulation. This gives an estimation of the average "purchase" price of BTC. This indicator triggers when the BTC price is below the realized price or above an RP extension. Because the "strength" of the BTC tops has decreased over the cycles, a logarithmic function for the extension was created by fitting past cycles as log extension = slope * time + intercept.
9) Plus Directional Movement (PDM) weekly index - The PDM is a momentum indicator that measures the strength of a trend in the positive direction. The weekly PDM is calculated by determining the difference between the week's high price and the previous week's high price smoothed by a 14-period moving average. Higher PDM values indicate higher momentum in the positive (higher price) direction. Based on decreasing "strength" of BTC tops, a decreasing linear function (trigger = slope * time + intercept) was fit to past cycle tops for this indicator. This indicator is triggered when the PDM is above the trigger value or below 14.
10) Logarithmic Moving Average Convergence Divergence (LMACD) weekly indicator - The LMACD is a momentum indicator that measures the strength of a trend using the difference of the log values of the 12-period and 26-week exponential moving averages. Larger positive numbers indicate a larger positive momentum. Based on decreasing "strength" of BTC tops, a decreasing linear function (trigger = slope * time + intercept) was fit to past cycle tops for this indicator. This indicator is triggered when the PDM is above the trigger value or below -0.06.
11) Hash Rate Capitulation (HRC) - The HRC indicator measures the rate of change of the hash rate. Steadily increasing hash rate is a sign of health of the bitcoin network. This indicator uses moving averages (20- and 100-day) of the hash rate to indicate when a decrease in the rate of change is has occurred (i.e., the 20-day MA goes below the 100-day MA). This indicator triggers when the 20-day moving average of the hash rate going below the 100-day moving average.
12) Pi-cycle Top (PCT) - The PCT indicator is simply the cross of the 111-day moving average above a 2x multiple of the 350-day moving average of the BTC price. While there is no fundamental reasoning behind why this works, it has worked to indicate previous bitcoin tops by taking advantage of the cyclicality of the BTC price and measurement overextension of BTC price. This indicator triggers when the fast moving average (111-day) crosses above the 2x multiple of the slow moving average (350-day).
13) Transaction Fee Spike (TFS) - Transaction fees on the bitcoin network can signal a mania phase when they increase well above historical values. This mania phase may indicate we are near a top in the BTC price. The daily transaction fee total in USD is divided by the number of daily transactions to calculate the average transaction fee paid on the bitcoin network. The transaction fees increasing above $40 trigger this indicator.
The on-chain indicators (CVDD, NUPL, MVRV-Z, PUELL, RP, and HRC) work together to give a health check of the BTC price as compared to its network health. The seasonality indicators (CSI, HSI, and PLR) work together to map the macro cycles of BTC. The momentum indicators (PDM and LMACD) give the strength of the BTC trend. Each of these indicators is weighted evenly when selected and if over 45% of the indicators are triggering on a candle, the overall BTB indicator prints a clear signal. This signal is meant to indicate when the macro cycle bottom or top is likely hit or is near.
You are able to deselect any indicator you do not wish to have considered and select it back again. To prepare you for indicators triggering, the BTB shows dark blue or dark green when the indicator is close to triggering. The background color of the BBI becomes blue when at least 30% of the indicators considered are triggering and it becomes green when the BBI fully triggers. The BLX is most appropriate chart, but the indicator works on all BTC/USD charts. Because of the limitations of TradingView, the indicator doesn't work on time frames lower than 4 h or over one week.
Use this indicator at your own risk. I make no assertions that this indicator will work to detect any future bottom or top since we all know that past performance is no guarantee of future results.
1) Cumulative Value Days Destroyed (CVDD) - The CVDD is the ratio of the cumulative value of coin days destroyed in USD and the market age (in days). When the BTC price goes below this value, BTC is generally considered to be undervalued. The bottom indicator is triggered when the BTC price is below the CVDD or above the CVDD extension. Because the "strength" of the BTC tops has decreased over the cycles, a logarithmic function for the extension was created by fitting past cycles as log extension = slope * time + intercept.
2) Net Unrealized Profit Loss (NUPL) - The NUPL measures if past transfers of BTC are currently in an unrealized profit or loss state. Historically positive or negative NUPL values indicate an over/undervaluation of the BTC network. The bottom indicator is triggered when the NUPL is below -15 and the top is triggered above an adjusted value based on decreasing "strength" of BTC tops. A decreasing linear function (trigger = slope * time + intercept) was fit to past cycle tops and used to determine overvaluation.
3) Market Value-Realized Value Z-score (MVRV-Z) - The MVRV-Z measures the value of the bitcoin network by comparing the market cap to the realized value and dividing by the standard deviation of the market cap (market cap – realized cap) / std(market cap)). The bottom indicator is triggered when the MVRVZ value is below 4 and tops are above 55.
4) Puell multiple (PUELL) - PUELL is the ratio between the daily coin issuance in USD and its 365-day moving average. This multiple helps to measure miner profitability. Extremes in PUELL may indicate tops or bottoms. The bottom indicator triggers when the PUELL is below 0.4 and top is triggered above 3.33.
5) Calendar Seasonality Index (CSI) - The CSI takes advantage of the consistency of BTC cycles. Past cycles have formed macro bottoms every four years between December and February which triggers the bottom indicator. Past cycles have formed macro tops every four years between October 21st and December 12th, triggering the top indicator.
6) Halving Seasonality Index (HSI) - Past cycles have formed macro bottoms approximately 948 days after each halving, triggering this indicator at set times, 948 +- 45 days, after each halving. Aside from the first halving, cycles have formed macro tops approximately 538 days after each halving. Therefore, this indicator triggers at 538 +- 10 days after each halving.
7) Polylog Regression (PLR) - The BTC cycle tops and bottoms were separately fit using a polynomial regression. The shape of the regression into the future was estimated and a fit was used to estimate when tops and bottoms are near. This triggers when the BTC price is inside or below the lower polylog regression channel and when the BTC price is inside or above the upper polylog regression channel.
8) Realized Price (RP) - The RP is summation of the value of each BTC when it last moved divided by the total number of BTC in circulation. This gives an estimation of the average "purchase" price of BTC. This indicator triggers when the BTC price is below the realized price or above an RP extension. Because the "strength" of the BTC tops has decreased over the cycles, a logarithmic function for the extension was created by fitting past cycles as log extension = slope * time + intercept.
9) Plus Directional Movement (PDM) weekly index - The PDM is a momentum indicator that measures the strength of a trend in the positive direction. The weekly PDM is calculated by determining the difference between the week's high price and the previous week's high price smoothed by a 14-period moving average. Higher PDM values indicate higher momentum in the positive (higher price) direction. Based on decreasing "strength" of BTC tops, a decreasing linear function (trigger = slope * time + intercept) was fit to past cycle tops for this indicator. This indicator is triggered when the PDM is above the trigger value or below 14.
10) Logarithmic Moving Average Convergence Divergence (LMACD) weekly indicator - The LMACD is a momentum indicator that measures the strength of a trend using the difference of the log values of the 12-period and 26-week exponential moving averages. Larger positive numbers indicate a larger positive momentum. Based on decreasing "strength" of BTC tops, a decreasing linear function (trigger = slope * time + intercept) was fit to past cycle tops for this indicator. This indicator is triggered when the PDM is above the trigger value or below -0.06.
11) Hash Rate Capitulation (HRC) - The HRC indicator measures the rate of change of the hash rate. Steadily increasing hash rate is a sign of health of the bitcoin network. This indicator uses moving averages (20- and 100-day) of the hash rate to indicate when a decrease in the rate of change is has occurred (i.e., the 20-day MA goes below the 100-day MA). This indicator triggers when the 20-day moving average of the hash rate going below the 100-day moving average.
12) Pi-cycle Top (PCT) - The PCT indicator is simply the cross of the 111-day moving average above a 2x multiple of the 350-day moving average of the BTC price. While there is no fundamental reasoning behind why this works, it has worked to indicate previous bitcoin tops by taking advantage of the cyclicality of the BTC price and measurement overextension of BTC price. This indicator triggers when the fast moving average (111-day) crosses above the 2x multiple of the slow moving average (350-day).
13) Transaction Fee Spike (TFS) - Transaction fees on the bitcoin network can signal a mania phase when they increase well above historical values. This mania phase may indicate we are near a top in the BTC price. The daily transaction fee total in USD is divided by the number of daily transactions to calculate the average transaction fee paid on the bitcoin network. The transaction fees increasing above $40 trigger this indicator.
The on-chain indicators (CVDD, NUPL, MVRV-Z, PUELL, RP, and HRC) work together to give a health check of the BTC price as compared to its network health. The seasonality indicators (CSI, HSI, and PLR) work together to map the macro cycles of BTC. The momentum indicators (PDM and LMACD) give the strength of the BTC trend. Each of these indicators is weighted evenly when selected and if over 45% of the indicators are triggering on a candle, the overall BTB indicator prints a clear signal. This signal is meant to indicate when the macro cycle bottom or top is likely hit or is near.
You are able to deselect any indicator you do not wish to have considered and select it back again. To prepare you for indicators triggering, the BTB shows dark blue or dark green when the indicator is close to triggering. The background color of the BBI becomes blue when at least 30% of the indicators considered are triggering and it becomes green when the BBI fully triggers. The BLX is most appropriate chart, but the indicator works on all BTC/USD charts. Because of the limitations of TradingView, the indicator doesn't work on time frames lower than 4 h or over one week.
Use this indicator at your own risk. I make no assertions that this indicator will work to detect any future bottom or top since we all know that past performance is no guarantee of future results.
เอกสารเผยแพร่:
1) Fixed multiple individual indicators to calculate correctly on the weekly timeframe.
2) Other minor fixes.
2) Other minor fixes.
เอกสารเผยแพร่:
1) Minor fix to correct unintended change to the bottom indicator trigger.