Onchain Analysis - BTC

2024年12月1日

Introduction

This indicator is designed to equip traders with actionable insights into long-term BTCUSD market dynamics through a blend of on-chain metrics and technical tools. It provides a streamlined visualization of market sentiment and critical price levels using unique and proprietary methodologies.

The script features:

1. NUPL (Net Unrealized Profit/Loss) with advanced bar color coding.
   
2. 350DMA and 350DMAx2, offering insights into key Bitcoin cycle levels.
   
3. Logarithmic Fibonacci Extension, aiding in precise target setting during price discovery phases.
   

Core Functionality

NUPL Analysis
NUPL reflects the network's aggregate unrealized profit or loss, calculated as (Market Cap − Realized Cap) / Market Cap. Bars are color-coded dynamically to simplify the interpretation of market sentiment. The emotional states (e.g., euphoria, fear) are visually represented for quick analysis, making this indicator particularly valuable for traders monitoring Bitcoin's macro cycles. This implementation improves clarity by aggregating NUPL across all holders rather than separating short- and long-term holders.

350DMA and 350DMAx2
The 350DMAx2 line has historical relevance as a key level during Bitcoin bull cycles, often acting as a resistance point during price rallies. This implementation also includes precise visualization of price interaction with the 350DMA, enabling traders to anticipate potential retracement or breakout zones. Furthermore, to minimize chart clutter, the 350DMA and 350DMAx2 lines are designed to dynamically appear only when the price is near these levels. This ensures that traders can focus on relevant data without unnecessary visual distractions.

Logarithmic Fibonacci Extensions
Unlike traditional Fibonacci extensions, logarithmic levels better suit assets like Bitcoin that grow exponentially. The calculated levels provide traders with clear targets in price discovery phases, enhancing the utility of this feature.

Key Advantages and Unique Features
Enhanced Visualization: NUPL bar color-coding simplifies sentiment analysis, allowing traders to instantly identify key turning points in market psychology.

Historical Context: The script incorporates insights derived from past market cycles, emphasizing the significance of 350DMAx2 levels.

Customization: Traders can adapt settings like lookback periods (e.g., 500 for daily, 100 for weekly) to fit their preferred timeframe and trading strategy.

Proprietary Insights: The script integrates logarithmic Fibonacci levels in a unique manner, optimizing their application to logarithmic assets.
Why This Indicator is Valuable

This indicator is not a simple combination of existing tools; it is a carefully curated suite of functionalities designed to address specific needs of crypto traders. The advanced NUPL representation and integration of logarithmic Fibonacci make it a distinct addition to any trader's toolkit. It provides clarity in interpreting long-term trends and offers actionable insights for navigating Bitcoin's cyclical nature.

How to Use

NUPL Monitoring

Pay close attention to initial color changes, e.g. orange and red, since it may establish clear pull-back. Especially, when bars turn black, it suggests that the market is heavily in profit, often signaling a market top.

350DMAx2 Interaction
If the price is trading below or near the 350DMAx2 level, it often reflects a key resistance zone. Historically, price rejections from this level are common, offering traders critical insights into potential retracement scenarios.

Logarithmic Fibonacci Extensions
Logarithmic Fibonacci extension levels are especially valuable for assets like BTCUSD, which exhibit logarithmic growth. These levels provide:

Target Identification: During price discovery phases, the logarithmic Fibonacci levels act as critical resistance or support points, enabling traders to set realistic price targets.

Market Top Detection: When extreme NUPL values (e.g., black bars) align with price interaction near logarithmic Fibonacci levels, the likelihood of a market top increases significantly. This alignment offers a robust method for identifying overbought or overextended market conditions.

Combining Concepts
When NUPL's extreme signals (e.g., red or black bars) align with price movements near the 350DMAx2 level, the likelihood of a significant pullback increases. Additionally, these scenarios can be further validated by observing logarithmic Fibonacci resistance levels, which can provide added confidence in identifying market tops during price discovery phases.