BTC Fair Value via Global Liquidity

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📈 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.

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Note di rilascio

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.