One Point Global Net Liquidity

The "Fuel" Behind the MarketMost traders look at price action, but price is often just a reflection of the money supply available in the system. This indicator tracks Global Net Liquidity—the actual amount of fiat currency available to flow into risk assets like Crypto and Equities.

Unlike standard "Money Supply" (M2) charts, this indicator focuses on Central Bank Balance Sheets, which is a more direct proxy for "Quantitative Easing" (QE) and "Quantitative Tightening" (QT).

How It Works (The Formula)

This script aggregates the balance sheets of the "Big 4" Central Banks, which represent ~90% of global liquidity. It automatically converts all values to USD Trillions for a standardized view.

{Global Liquidity} = {US Net Liquidity} + {ECB} + {PBoC} + {BoJ}

1. US Net Liquidity (The "Trader's" Formula) We do not just use the Fed's Total Assets. We subtract the money that is "stuck" outside the private economy:

(+) Fed Balance Sheet: Total Assets.

(-) TGA (Treasury General Account): The government's checking account. When this goes up, liquidity is drained from markets.

(-) RRP (Reverse Repo): Money parked by banks at the Fed overnight. When this goes up, liquidity is removed from the system.

2. Global Additions

ECB (Eurozone): Converted to USD.

PBoC (China): Converted to USD.

BoJ (Japan): Converted to USD.

How to Use This Indicator This indicator is designed as an Overlay on the main chart (using the Left Scale).

Correlation: Generally, when the Orange Line (Liquidity) trends up, Bitcoin and the S&P 500 trend up. When Central Banks tighten (line down), risk assets struggle.

The "Divergence" Signal (Alpha):

Bullish: If Price makes a Lower Low but Liquidity makes a Higher Low, it often signals seller exhaustion and a potential bottom.

Bearish: If Price makes a New High but Liquidity fails to follow (or drops), the rally may be unsupported and prone to a reversal.

Settings

Scale: This indicator is pinned to the Scale Left to allow it to overlay price action without distortion.

Data: Uses daily data from ECONOMICS and FRED feeds.