OPEN-SOURCE SCRIPT
Bitcoin Cost Of Production
Description
This indicator estimates a Bitcoin “Cost Floor” proxy using network difficulty as a substitute for direct energy costs. The goal is not to compute real-world mining costs, but to display a structural cost-pressure baseline derived from on-chain and market data.
The model is intentionally simple and uses two externally fitted parameters (alpha, k).
No fitting is performed inside Pine.
How the model works
The cost proxy is defined as:
Cost Floor = alpha ⋅ Difficulty^k / Issuance
Inputs:
• Difficulty (GLASSNODE:BTC_DIFFICULTY)
• Issuance = Subsidy ⋅ Blocks Mined + Fees_BTC
Parameters (fitted externally in Python):
• alpha: scaling factor to map the proxy into price space (USD).
• k: damping exponent on difficulty. This reduces the sensitivity of the model to long-term technological progress and efficiency gains in mining hardware.
What the indicator displays
• Smoothed Cost Floor (purple)
• Cost Zone (purple zone): Cost × 1.2
• Raw Cost Floor (yellow, optional)
How to use it
This is not a timing tool. It provides a macro context for where price trades relative to a difficulty/issuance-based cost-pressure proxy.
It may be useful for:
• cycle context (stress vs relief regimes)
• comparing price drawdowns against a structural baseline
• studying long-term support behavior during miner stress phases
Important notes
• This indicator does not repaint.
• This script is designed only for INDEX:BTCUSD.
• It does not provide trading signals or financial advice.
This indicator estimates a Bitcoin “Cost Floor” proxy using network difficulty as a substitute for direct energy costs. The goal is not to compute real-world mining costs, but to display a structural cost-pressure baseline derived from on-chain and market data.
The model is intentionally simple and uses two externally fitted parameters (alpha, k).
No fitting is performed inside Pine.
How the model works
The cost proxy is defined as:
Cost Floor = alpha ⋅ Difficulty^k / Issuance
Inputs:
• Difficulty (GLASSNODE:BTC_DIFFICULTY)
• Issuance = Subsidy ⋅ Blocks Mined + Fees_BTC
Parameters (fitted externally in Python):
• alpha: scaling factor to map the proxy into price space (USD).
• k: damping exponent on difficulty. This reduces the sensitivity of the model to long-term technological progress and efficiency gains in mining hardware.
What the indicator displays
• Smoothed Cost Floor (purple)
• Cost Zone (purple zone): Cost × 1.2
• Raw Cost Floor (yellow, optional)
How to use it
This is not a timing tool. It provides a macro context for where price trades relative to a difficulty/issuance-based cost-pressure proxy.
It may be useful for:
• cycle context (stress vs relief regimes)
• comparing price drawdowns against a structural baseline
• studying long-term support behavior during miner stress phases
Important notes
• This indicator does not repaint.
• This script is designed only for INDEX:BTCUSD.
• It does not provide trading signals or financial advice.
开源脚本
秉承TradingView的精神，该脚本的作者将其开源，以便交易者可以查看和验证其功能。向作者致敬！您可以免费使用该脚本，但请记住，重新发布代码须遵守我们的网站规则。
免责声明
这些信息和出版物并非旨在提供，也不构成TradingView提供或认可的任何形式的财务、投资、交易或其他类型的建议或推荐。请阅读使用条款了解更多信息。
开源脚本
秉承TradingView的精神，该脚本的作者将其开源，以便交易者可以查看和验证其功能。向作者致敬！您可以免费使用该脚本，但请记住，重新发布代码须遵守我们的网站规则。
免责声明
这些信息和出版物并非旨在提供，也不构成TradingView提供或认可的任何形式的财务、投资、交易或其他类型的建议或推荐。请阅读使用条款了解更多信息。