BTC Fair Value via Global Liquidity

5 Mei

📈 BTC Fair Value via Global Liquidity
This indicator estimates Bitcoin's fair value based on a regression model using Global Liquidity (GLI) data from major central banks.

🔍 How it works:

Fair Value Line (orange): Calculated using a power-law model: Fair Value = e^b * (GLI)^a, where a and b are user-defined parameters based on historical regression.

Global Liquidity (GLI): Combines liquidity metrics from central banks (Fed, ECB, PBoC, BoJ, etc.), including adjustments for the RRP and TGA.

Deviation Bands (green/red dashed): Optional upper and lower bands showing % deviation from fair value (default ±25%). These help identify overbought/oversold conditions.

Delta Plot (gray dots): Displays the % deviation of BTC’s price from its modeled fair value.

⚙️ How to use:

Tune a and b for better model fitting (e.g., via log-log regression).

Use the deviation bands to identify potential entry/exit zones or periods of market inefficiency.

Ideal for macro-level BTC valuation and long-term strategic analysis.

5 Mei

Nota Keluaran

BTC Fair Value via Global Liquidity Indicator
This indicator calculates the fair value of Bitcoin (BTC) based on global liquidity factors. The fair value is derived through a mathematical model that uses global liquidity indicators (GLI) from multiple central banks and financial sources.

How It Works:
Fair Value Calculation: The fair value of BTC is calculated using the formula:

Fair Value
=
exp
⁡
(
𝑏
)
×
(
GLI
)
𝑎
Fair Value=exp(b)×(GLI)
a

Where a is the exponent and b is the intercept, which are adjustable inputs. These parameters define the relationship between global liquidity and Bitcoin's fair value.

Global Liquidity (GLI): The indicator incorporates liquidity data from multiple central banks, such as:

Federal Reserve (FED)

Reverse Repo (RRP)

Treasury General Account (TGA)

European Central Bank (ECB)

People's Bank of China (PBC)

Bank of Japan (BOJ)

Other central banks

The liquidity from these sources is combined and normalized to reflect the total global liquidity in trillions of USD.

Deviation Bands: Optional deviation bands are plotted above and below the fair value line. These bands represent a percentage deviation (configurable) from the fair value, giving you a visual idea of overbought or oversold conditions in relation to the fair value.

Inputs:
Fair Value Exponent (a): Determines the sensitivity of the fair value to global liquidity (default: 1.8).

Fair Value Intercept (b): A constant offset for the fair value calculation (default: 7.5).

Deviation Bands: Toggle to show or hide deviation bands.

Band Width (%): Controls the width of the deviation bands.

How to Use:
Above Fair Value: When the price is above the fair value, Bitcoin might be overbought, and a correction or price retracement could occur.

Below Fair Value: When the price is below the fair value, Bitcoin might be oversold, signaling a potential buying opportunity.

Deviation Bands: The bands act as additional markers. When the price reaches or exceeds the upper or lower bands, it may indicate extreme conditions or market reversals.

This indicator is designed for traders who want to analyze Bitcoin's price relative to global liquidity changes, making it a powerful tool for long-term price prediction and understanding macroeconomic forces affecting the Bitcoin market.

7 Mei

Nota Keluaran

BTC Fair Value via Global Liquidity
This indicator estimates the fair value of Bitcoin (BTC) based on global liquidity conditions. It provides a macroeconomic benchmark by aggregating central bank liquidity data from around the world and translating it into a long-term valuation model for BTC.

What It Does
Uses daily data from major central banks (like the FED, ECB, PBoC, BOJ, and others) to construct a global liquidity index (GLI).

Applies a fitted regression model to estimate where BTC's price should be, based on this liquidity.

Plots the fair value line and optional deviation bands to show potential overvalued or undervalued zones.

How to Use It
The orange line represents BTC’s estimated fair value relative to global liquidity.

The green and red bands show customizable percentage ranges above and below this fair value.

When BTC trades well above the fair value, it may signal long-term overvaluation. When it's below, it could suggest an undervalued opportunity.

Key Features
Timeframe-independent output: The indicator always reflects daily macro data, even when viewed on other timeframes, but it is most accurate on the Daily chart.

Important note: The indicator only works correctly on the Daily chart, as it relies on daily data from central banks. On smaller timeframes, the values may not be accurate due to interpolation.

Adjustable parameters for model calibration.

Supports multiple central banks and liquidity components with user toggles.

This indicator is most useful for long-term investors, macro traders, and analysts who want to track how Bitcoin is valued in relation to global monetary expansion or contraction.