Crypto Realized Profits/Losses Extremes [AlgoAlpha]🌟🚀 Introducing the Crypto Realized Profits/Losses Extremes Indicator by AlgoAlpha 🚀🌟
Unlock the potential of cryptocurrency markets with our cutting-edge On-Chain Pine Script™ indicator, designed to highlight extreme realized profit and loss zones! 🎯📈
Key Features:
✨ Realized Profits/Losses Calculation: Uses real-time data from the blockchain to monitor profit and loss realization events.
📊 Multi-Crypto Compatibility: The Indicator is compatible on other Crypto tickers besides Bitcoin.
⚙️ Customizable Sensitivity: Adjust the look-back period, normalization period, and deviation thresholds to tailor the indicator to your trading style.
🎨 Visual Enhancements: Choose from a variety of colors for up and down trends, and toggle extreme profit/loss overlay for easy viewing.
🔔 Integrated Alerts: Set up alerts for high and extreme profit or loss conditions, helping you stay ahead of significant market movements.
🔍 How to Use:
🛠 Add the Indicator: Add the indicator to favorites. Customize settings like period lengths and deviation thresholds according to your needs.
📊 Market Analysis: Monitor the main oscillator and the bands to understand current profit and loss extremes in the market. When the oscillator is at the upper band, this means that the market is doing really well and traders/investors will be likely to take profit and cause a reversal. The opposite is true when the oscillator reaches the lower band. The main oscillator can also be used for trend analysis.
🔔 Set Alerts: Configure alerts to notify you when the market enters a zone of high profit or loss, or during trend changes, enabling timely decisions without constant monitoring.
How It Works:
The indicator calculates a normalized area under the RSI curve applied on on-chain data regarding the number of wallets in profit. It employs a custom "src" variable that aggregates data from the blockchain about profit and loss addresses, adapting to intraday or longer timeframes as needed. The main oscillator plots this normalized area, while the upper and lower bands are plotted based on a deviation metric to identify extreme conditions. Colored fills between these bands visually denote these zones. For interaction, the indicator plots bubbles for extreme profits or losses and provides optional bar coloring to reflect the current market trend.
🚀💹 Enjoy a comprehensive, customizable, and visually engaging tool that helps you stay ahead in the fast-paced crypto market!
Onchain_analysis
MVRV Z-Score [AlgoAlpha]Introducing the ∑ MVRV Z-Score by AlgoAlpha, a dynamic and sophisticated tool designed for traders seeking to gain an edge in INDEX:BTCUSD analysis. This script employs advanced statistical techniques on Bitcoin On-Chain data to offer a deeper understanding of market conditions, focusing on valuation extremes and momentum trends. Let's explore the features and functionalities that make this tool a valuable addition to your trading arsenal.
Key Features:
🔶 Adjustable Parameters: Customize the Z score lookback length, moving average lookback length, and choose from six moving average types, tailoring the analysis to your trading style.
🔶 Heiken Ashi Compatibility: Incorporate Heiken Ashi plots to visualize market trends, adding a layer of clarity to your technical analysis.
🔶 Divergence Alerts: Detect significant bullish and bearish divergences, allowing for timely identification of potential market reversals.
🔶 Configurable Alerts: Set alerts for overbought, oversold, and divergence conditions, ensuring you never miss an opportunity.
How to Use:
1. ➡️ Parameter Selection: Start by configuring the Z-Score and moving average settings according to your analysis needs. This includes selecting the lookback period and the type of moving average.
2. ➡️ Visualization Options: Choose to enable Heiken Ashi plots for an alternative view of the Z-Score, which can help in identifying trend directions more clearly.
3. ➡️ Monitor for Signals: Keep an eye out for divergence signals and overbought/oversold conditions as potential indicators for entering or exiting trades.
4. ➡️ Alert Setup: Configure alerts based on your selected parameters to receive notifications for important market movements and conditions.
How It Works:
The core of this tool is the Z-Score calculation, which assesses the standard deviation of the current market value from its mean, highlighting overvalued or undervalued market conditions. Here's a brief overview of the script's operational mechanics:
1. 📊 Calculating the Z-Score: The script first calculates the mean over a user-defined lookback period of the MVRV ratio, then it computes the Z-Score to identify deviations from the average.
meanValue = ta.sma(marketValue, zScoreLookback)
zScoreValue = (marketValue - meanValue) / ta.stdev(marketValue, zScoreLookback)
2. 📈 Applying a Moving Average: To smooth the Z-Score data and make trends more discernible, a moving average is applied. Users can choose from several types, such as SMA, EMA, or HMA, based on their preference.
3. 🔄 Heiken Ashi Visualization: For those opting for a more intuitive trend analysis, Heiken Ashi plots can be enabled, transforming the Z-Score data into candlestick charts that simplify trend identification.
4. 🔍 Identifying Divergences: The script is equipped to spot divergences between the market price action and the Z-Score, signaling potential bullish or bearish market reversals.
oscHigherLow = haClose > ta.valuewhen(findPivotLow, haClose , 1) and isInRange(findPivotLow )
priceLowerLow = low < ta.valuewhen(findPivotLow, low , 1)
bullishCondition = enablePlotBullish and priceLowerLow and oscHigherLow and findPivotLow
5. 🚨 Configurable Alerts: Lastly, the script allows for the setting of customizable alerts based on the Z-Score, moving averages, and identified divergences, enabling traders to react promptly to market changes.
The ∑ MVRV Z-Score by AlgoAlpha is an essential tool for traders looking to analyze and interpret market dynamics through a quantitatively rigorous lens. Whether you're focused on identifying market extremes or tracking trend momentum, this script offers the insights needed to support informed trading decisions. 🌟📊💡
BTC Supply in Profits and Losses (BTCSPL) [AlgoAlpha]Description:
🚨The BTC Supply in Profits and Losses (BTCSPL) indicator, developed by AlgoAlpha, offers traders insights into the distribution of INDEX:BTCUSD addresses between profits and losses based on INDEX:BTCUSD on-chain data.
Features:
🔶Alpha Decay Adjustment: The indicator provides the option to adjust the data against Alpha Decay, this compensates for the reduction in clarity of the signal over time.
🔶Rolling Change Display: The indicator enables the display of the rolling change in the distribution of Bitcoin addresses between profits and losses, aiding in identifying shifts in market sentiment.
🔶BTCSPL Value Score: The indicator optionally displays a value score ranging from -1 to 1, traders can use this to carry out strategic dollar cost averaging and reverse dollar cost averaging based on the implied value of bitcoin.
🔶Reversal Signals: The indicator gives long-term reversal signals denoted as "▲" and "▼" for the price of bitcoin based on oversold and overbought conditions of the BTCSPL.
🔶Moving Average Visualization: Traders can choose to display a moving average line, allowing for better trend identification.
How to Use ☝️ (summary):
Alpha Decay Adjustment: Toggle this option to enable or disable Alpha Decay adjustment for a normalized representation of the data.
Moving Average: Toggle this option to show or hide the moving average line, helping traders identify trends.
Short-Term Trend: Enable this option to display the short-term trend based on the Aroon indicator.
Rolling Change: Choose this option to visualize the rolling change in the distribution between profits and losses.
BTCSPL Value Score: Activate this option to show the BTCSPL value score, ranging from -1 to 1, 1 implies that bitcoin is extremely cheap(buy) and -1 implies bitcoin is extremely expensive(sell).
Reversal Signals: Gives binary buy and sell signals for the long term
Limited Growth Stock-to-Flow (LGS2F) [AlgoAlpha]Description:
The "∂ Limited Growth Stock-to-Flow (LG-S2F)" indicator, developed by AlgoAlpha, is a technical analysis tool designed to analyze the price of Bitcoin (BTC) based on the Stock-to-Flow model. The indicator calculates the expected price range of BTC by incorporating variables such as BTC supply, block height, and model parameters. It also includes error bands to indicate potential overbought and oversold conditions.
How it Works:
The LG-S2F indicator utilizes the Stock-to-Flow model, which measures the scarcity of an asset by comparing its circulating supply (stock) to its newly produced supply (flow). In this script, the BTC supply and block height data are obtained to calculate the price using the model formula. The formula includes coefficients (a, b, c) and exponentiation functions to derive the expected price.
The script incorporates error bands based on uncertainty values derived from the standard errors of the model parameters. These error bands indicate the potential range of variation in the expected price, accounting for uncertainties in the model's parameters. The upper and lower error bands visualize potential overbought and oversold conditions, respectively.
Usage:
Traders can utilize the LG-S2F indicator to gain insights into the potential price movements of Bitcoin. The indicator's main line represents the expected price, while the error bands highlight the potential range of variation. Traders may consider taking long positions when the price is near or below the lower error band and short positions when the price is close to or above the upper error band.
It's important to note that the LG-S2F indicator is specifically designed for Bitcoin and relies on the Stock-to-Flow model. Users should exercise caution and consider additional analysis and factors before making trading decisions solely based on this indicator.
Originality:
The LG-S2F indicator, developed by QuantMario and AlgoAlpha, is an original implementation that combines the Stock-to-Flow model with error bands to provide a comprehensive view of BTC's potential price range. While the concept of Stock-to-Flow analysis exists, the specific calculations, incorporation of error bands, and customization options in this script are unique to QuantMario's methodology. The script is released under Mozilla Public License 2.0, allowing users to utilize and modify it while adhering to the license terms.
Supply Weighted Moving Average: OnchinUse this Onchain Channel in Weekly Timeframe - on BTCUSD BUTSTAMP Chart:
This Moving average channel is weighted based on BTC's new Supply:
I believe the slope of the Bitcoin trend line is correlated to the new supply and the issue of Halving.
The chart below shows this:
In fact, after each Halving, the supply is halved. Halving the supply increases the demand-for-supply ratio and increases the price. But the uptrend slope also halves after each halving.
Therefore, the slope of the bitcoin trend is correlated with the new supply rate. This is the logic of this new metric.
Accordingly, the moving average is weighted based on the new supply. This new channel can identify where bitcoin is too cheap or too expensive in the historical chart. It has also marked support/resistance Supply Weighted Moving Average.
BTC New Supply: OnchainThis Onchain Metric shows the sum of newly issued coins.
This metric is very useful for finding new bull run cycles in the market. The new bull run is accompanied by a significant drop in the new supply.
BTC Supply weighted channel: OnchainUse this oscillator in the weekly time frame and then draw the above linear channel
The premise of this idea is that the trend slope of the bitcoin price correlates with the bitcoin supply chart, which shows the total amount of bitcoin ever created/issued.
Therefore, Bitcoin price is weighted based on Bitcoin supply.
As a result, the above channel has been created, which is a linear channel, and it seems that it can be an oscillator to determine the bitcoin trend, as well as the tops and bottoms of the market.
Bitcoin seems to respect the bottom and top lines of this channel as well as its midline
BTC Leading SOPR: OnchainUse This indicator in Weekly Timeframe:
This Onchain Metric is based on SOPR Moving Average.
This metric is very efficient for finding the tops and bottoms of the market as well as the ascending or descending biases in the market.
You can use it alongside RSI to filter out incorrect rsi signals
overhigh areas signal a top, overlow areas signal a low, zero line cross-up indicates an uptrend bias and its cross-down indicates a downtrend bias in the market
BTC SOPR Momentum: OnchainThis Onchin metric is based on SOPR data
Use this metric on daily and weekly timeframes:
SOPR:
The Spent Output Profit Ratio (SOPR) is computed by dividing the realized value (in USD) divided by the value at creation (USD) of a spent output. Or simply: price sold / price paid. Renato Shirakashi created this metric. When SOPR > 1, it means that the owners of the spent outputs are in profit at the time of the transaction; otherwise, they are at a loss. You can find "SOPR" in tradingview indicators
BTC SOPR Momentum: Onchain
This metric is based on SOPR Momentum. I made some changes to it so that its momentum can be checked.
Interpretation:
If the indicator is above the gray level of resistance/support, bitcoin has an uptrend and Bullish bias
If the indicator is below the resistance/ support level, bitcoin has a downtrend and Bearish Bias
Crossup the gray level is a long signal
Cross-down the gray level is a shorts signal
Entering and exit of the indicator to the overhigh area means creating a top
Entering and leaving the indicator to the overflow area means creating a bottom
V/T Ratio: Onchain BTC MetricThis is a New Onchain metric that is designed for bitcoin by myself Mjshahsavar (Ghoddusifar), and it is published for the first time in this trading view in this post.
I think this metric has a very high capability to determine the ATH and bottom of the market. This metric can solve a problem that channels are unable to solve. this could be the equivalent of what is known in the stock market as P/E
Calculations:
V/T RATIO = MA (7) of Log ((THE TOTAL VOLUME OF BITCOIN TRANSFERRED ONCHAIN IN USD)/(THE TOTAL AMOUNT OF TRANSACTIONS))
INTERPRETATION:
What is the long-term price channel of Bitcoin? Have you ever thought that maybe drawing a price channel is not right and maybe we should look for something else?
Channel drawing for the price is a subjective and interpretive subject. Look at the charts below, they are all correct in terms of drawing, but no one can say which one will happen. There is no certainty because drawing them is objective.
But who can say which one will definitely work?
We need something more objective. I think V/T Ratio does that.
Just draw the channel. There is only one channel for it. And it has worked historically well to this day.
Compare the drawn channel with the price chart. It works right. When the metric reaches the top line of the channel, it indicates the new ATH and the end of the cycle.
When it reaches the bottom line of the channel, it indicates that the price has reached the bottom.
A Market Cycle:
According to this metric, the bitcoin cycle has 5 stages:
1- Bottom Price: which V/T Ratio touches the bottom line of the channel: In this case, we expect the price to reach the bottom.
2- Semi-high price: that the metric reaches the middle line of the channel: In this case, Bitcoin creates a local top in the MID-Term and Long-Term timeframes
3- Semi-low price: which has a metric return to the lower part of the channel (but the price can still increase)
4- ATH: that Bitcoin reaches its highest historical price
5- It starts after the ATH until the metric reaches the bottom part of the channel again.
NVT Ratio: OnchainNVT Ratio
Defined as the ratio of market capitalization divided by transacted volume (in USD).
Network Value to Transactions Ratio (NVT Ratio) is defined as the ratio of market capitalization divided by transacted volume in the specified window.
History
NVT first made an appearance as a tweet on Woo Bull account in Feb 2017. In that tweet he promised an explanatory article which came much later in Oct 2017, first debuting on Forbes.
In Feb 2018, Dimitry Kalichkin published his work to improve NVT for use as a more responsive indicator, hence Kalichkin NVT Signal. In the same month, Woo Bull applied some trader techniques to NVT Signal and published an article summarising how to use it within a trading environment.
Interpretation:
NVT Ratio (Network Value to Transactions Ratio) is similar to the PE Ratio used in equity markets.
this indicator measures whether the blockchain network is overvalued or not.
When Bitcoin`s NVT is high, it indicates that its network valuation is outstripping the value being transmitted on its payment network, this can happen when the network is in high growth and investors are valuing it as a high return investment, or alternatively when the price is in an unsustainable bubble.
High: Overvalued Network worth - Bearish
Marketcap is too much valued compared to the low ability to transact coins in terms of volume
Low : Undervalued Network worth - Bullish
Marketcap is undervalued compared to the high ability to transact coins in terms of volume
NVM Ratio: OnchainNetwork Value to Metcalfe Ratio (NVM Ratio) is defined as the ratio of the log of market capitalization divided by the log of the square of daily active addresses.
This oscillator evaluates bitcoin price according to the Metcalfe Ratio to show whether the current value of Bitcoin is higher or lower than the real price
in this oscillator, High values indicate the overvalued price, and low values indicate undervalued price.
BTC Active1Y holders: OnchainUse this Indicator in The Weekly timeframe
This indicator is based on "Percent of Supply Last Active 1+ Years Ago".
This is so important indicator that shows " The percent of circulating supply that has not moved in at least 1 year."
It can show the situation of the holders who have been holding their coins for more than a year. When this indicator starts to decline, it means that the price has risen so much that the holders are selling their coins. When this indicator starts to increase, it means that the number of coins held has been increasing for more than a year. This is because the price is too low for investors.
This indicator can be used to indicate accumulation and distribution areas. When the indicator enters the overlow area (red) it means that the distribution is happening
When the indicator enters the overhigh range (blue), it means that accumulation is taking place by the holders
BTC HASHRATE DROP: OnchainWhy is the drop of hashrate important?
Drop of hashrate usually occurs because some miners in the mining network stop for working. There are several possible reasons for this. Such as new anti-mining regulations in some countries or a sharp drop in the price of bitcoin, which makes mining no longer affordable for some miners. So they turn off their devices
This reduces the supply of bitcoin in the market and according to the law of supply and demand can eventually lead to an increase in the price of bitcoin.
This oscillator is designed to detect hashrate drop. for this, we use the data of glassnode . Maroon color indicates decrease in hashrate and Red color indicates excessive hash rate drop. As can be seen on the chart, usually after this drop, we see an increase in the price of bitcoin
BTC NVM Ratio - Onchain AnalysisIt is an onchain oscillator and is designed to operate at weekly timeframes and is only for Bitcoin.
Network Value to Metcalfe Ratio (NVM Ratio) is defined as the ratio of the log of market capitalization divided by the log of the square of daily active addresses in the specified window.
This oscillator evaluates bitcoin price according to the Metcalfe Ratio to shows whether the current value of Bitcoin is higher or lower than the real price
I made this comparison using a moving average of 100. The areas that are red in the weekly timeframe indicate that bitcoin is Overvalued. and The areas that are blue in the weekly timeframe indicate that bitcoin is undervalued.
BTC Composite Man V.1Wyckoff's theory t is one of the most influential theories of market expression, and the most important components of which are lateral movement areas and trends. This theory turns the graph into something like Dots and lines (stations and paths).
After getting acquainted with Wyckoff's theory, I read several books on the subject, hoping that they could help me identify this area of lateral movement, the area of accumulation, or distribution. But there was a fundamental drawback. It is challenging to diagnose this issue. The rules discussed in these books are highly interpretive and subjective, and two different individual traders may come to exactly opposite conclusions based on their interpretation.
But as I became more familiar with the onchain analysis, an idea came to my mind that might be useful for more objectively recognizing charts based on Wyckoff's theory.
Composite Man: Wyckoff proposed a theory to help understand stock price movements. this is the “Composite Man” theory. (The same concept of whales or strong hands.)
he said: “…all the fluctuations in the market and all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2)
Composite Man is a hypothetical man who has so much money and stocks that when he wants he can gradually increase the price by buying stocks and creating demand, and when the price goes high enough he sells his stock and lower the price. The composite man is the main player in the market. Wyckoff says that if you want to make a good profit from the market, figure out what a composite man game is.
Having a way of showing us where the Composite Man is in the market, can help us understand future trends
Who are the strong hands in the cryptocurrency market? (I use the strong hand word here instead of the composite man)
Some buy or sell more per capita than other market participants (retailers).
To understand this in the bitcoin market, I have used 3 charts and concepts:
1- Sending Addresses: The number of coins addresses making inflow transactions to the exchange.
Indicates the number of sellers' wallets (number of sellers)
2- buyers Addresses: The number of coins addresses making outflow transactions from the exchange.
Indicates the number of buyers' wallets (number of buyers)
3- Pay attention to this issue: the volume of transactions shows both the volume of sales and the buy ( Volume of buy and sale is equal in the market)
The Composite Man indicator is created by dividing the Receiving Addresses of bitcoin by the Sending Addresses. After dividing these addresses, the moving average of Alma was calculated for them and compared with the moving average of 100 days.
Considering the above 3 issues, it can be concluded:
- If the number of Receiving Addresses is higher than the Sending Addresses (the number of people who bought compared to the number of those who sold), it indicates that more people bought and fewer people sold (given that the volume of sales and buys are the same) So the sellers were stronger hands. In such a situation, the composite man is on the sales side.
- If the number of Sending Addresses is higher than the Receiving Addresses (number of people who have sold more than the number of people who have bought), it indicates that more people have been sellers and fewer people have been buyers (given that the volume of sales and buys are the same) so the buyers were stronger hands. In such a situation, the Composite man is on the buying side.
Accordingly, if the swing line is above the 100-day moving average line, it indicates that stronger addresses are being sold and retailers are buying, and vice versa.
