Full Cycle Valuation | QuantumResearch

15 Feb

QuantumResearch Full Cycle Valuation Indicator for BTC only!

The Full Cycle Valuation indicator is an advanced on-chain valuation model that synthesizes multiple fundamental Bitcoin metrics into a single, normalized score.

By leveraging Power Law Corridor, Pi Cycle Top, Crosby Ratio, MVRV Z-Score, SOPR Z-Score, NUPL Z-Score, BAERM, and other key valuation signals, this tool provides traders and investors with an intuitive way to assess Bitcoin’s market cycle positioning and identify potential overbought or undervalued conditions. 🚀📊

1. Overview

This indicator helps users:
Identify Market Cycles – Uses a blend of statistical and fundamental models to determine whether Bitcoin is undervalued or overvalued.🔄

Normalize On-Chain & Valuation Metrics – Standardizes multiple valuation indicators through Z-score transformation for clearer insights📉📈

Assess Risk & Reward – Generates an Average Valuation Z-score, offering a high-level overview of current market positioning. ⚖️

Customize Visual Preferences – Dynamic color-coded signals, background fills, and table-based valuation metrics enhance usability. 🎨

2. How It Works

A. Power Law Corridor

The Power Law Model provides a long-term price corridor for Bitcoin based on a logarithmic regression formula. 🔢

The indicator evaluates where the current price sits relative to the Power Law Support & Resistance levels. 📊

Normalized Z-score Calculation: A standardized metric indicating overvaluation or undervaluation. 🎯

B. Pi Cycle Top

Uses the 111-day and 350-day moving averages to identify cyclical market peaks. 🔺

Generates a Z-score that measures deviation from historical overbought conditions. ⚠️

C. Crosby Ratio

Measures market momentum by analyzing Heikin-Ashi candle trends and ATR-based volatility. 📊

Provides a weekly trend strength score that is normalized into a Z-score. 📈

D. MVRV Z-Score

Compares Bitcoin's Market Cap to Realized Cap to assess whether price is above or below fair value. 💰

The higher the MVRV Z-score, the more overvalued Bitcoin is; lower scores indicate undervaluation. 🔻

E. SOPR Z-Score

Spent Output Profit Ratio (SOPR) measures profit-taking behavior in the market. 💵

SOPR is smoothed and standardized to filter out noise and highlight macro trends. 📊

F. NUPL Z-Score

Net Unrealized Profit/Loss (NUPL) calculates the proportion of coins held in profit versus loss. 📉📈

High Z-score values indicate speculative euphoria, while low values suggest capitulation. ⚠️

G. BAERM (Bitcoin AR Model)

BAERM is a statistical model that incorporates Bitcoin's supply, halvings, and historical growth trends to estimate fair value. 📉

This model is adjusted with a damping function to remove excess noise. 🎛️

H. Composite Full Cycle Z-Score

The indicator calculates a weighted average Z-score across all valuation models to generate a final Full Cycle Valuation Score. 📊

The score is used to define five distinct market states:

Very Undervalued (-3 to -2 Z-score): Ideal accumulation zone. 🟢

Undervalued (-2 to -1.5 Z-score): Accumulate Bitcoin at a discount. 🔵

Neutral (-1.5 to +1.5 Z-score): Fair market conditions. ⚪

Overheated (+1.5 to +2 Z-score): Potential distribution phase. 🟠

Very Overheated (>2 Z-score): High risk of market tops. 🔴


3. Visual Representation

This indicator offers multiple dynamic visual elements to improve clarity and ease of use:

Color-Coded Background Fill
Green Background – Indicates undervalued market conditions (Accumulation). 🟢
Blue Background – Signals overheated conditions (Distribution). 🔵



Table Display for Z-Scores

Displays each individual valuation model’s Z-score in a compact, color-coded format. 📊

The final average Z-score is highlighted, along with a corresponding market action recommendation. 🎯

4. Customization & Parameters

Traders and analysts can fine-tune the Full Cycle Valuation indicator to match their specific strategies:

On-Chain Valuation Metrics MVRV, SOPR, and NUPL Z-score lengths can be adjusted for different market perspectives.

Market Cycle Models Power Law Corridor: Adjustable regression parameters to modify long-term projections.

Pi Cycle & Crosby Ratio: Customizable smoothing lengths.

Threshold Adjustments Modify overvaluation and undervaluation thresholds to fine-tune signal sensitivity.

Visual Settings

Valuation Mode: Allows traders to switch between default mode and valuation-focused color themes. 🎨

5. Trading Applications

This indicator is not just for trading—it serves as a powerful macro analysis tool:

Long-Term Investing – Helps Bitcoin investors identify key accumulation and distribution phases. 📈

Market Timing – Guides traders in recognizing overbought and oversold conditions based on fundamental valuation. ⏳

Risk Management – Provides a systematic way to assess whether Bitcoin is fundamentally cheap or expensive. ⚠️

Cyclical Trend Analysis – Helps long-term investors compare past market cycles and spot repeating patterns. 🔄

6. Final Thoughts

The Full Cycle Valuation Indicator is a comprehensive macro valuation tool that combines multiple on-chain, statistical, and fundamental models into one easy-to-interpret score.

Whether you are a long-term investor looking to time Bitcoin cycles or a trader searching for additional confluence, this tool offers invaluable insights.

Important Disclaimer: No indicator can predict future price action with certainty. Always perform additional research and use proper risk management when making investment decisions. ⚠️📊

4 Mac

Nota Keluaran

Added the ability to turn on/off the table!