Introduction
The "Bitcoin Full Cycle Valuation" is a sophisticated TradingView indicator designed to provide traders and analysts with a comprehensive view of Bitcoin's market conditions. By integrating a diverse set of fundamental and technical indicators, this tool calculates Z-scores to assess whether Bitcoin is overbought, oversold, or in a neutral state. Its primary purpose is to assist users in making informed trading decisions by offering a multi-dimensional evaluation of Bitcoin's valuation, leveraging on-chain data, market sentiment, and technical analysis.

Key Features   

• Multi-Dimensional Valuation: Combines a wide array of indicators, including MVRV, Bitcoin Thermocap, NUPL, CVDD, SOPR, RSI, CCI, Normalized Moving Averages, Sharpe Ratio, Pi Cycle, NHPF, and VWAP, to deliver a holistic perspective on Bitcoin's market state.

• Z-Score Calculation: Normalizes each indicator into a Z-score, enabling standardized comparisons across different metrics and timeframes.

• Customizable Visualization: Allows users to select which Z-score to plot (e.g., MVRV, RSI, Average Z-Score) and adjust parameters for each indicator to align with their analysis preferences.

• Dynamic Table Display: Presents a detailed table with Z-scores, market conditions (e.g., OverBought, OverSold), and Rate of Change (ROC) for each indicator, enhanced with fixed-width bars for quick visual interpretation.

• Bar Coloring and Background Effects: Colors the chart’s price bars based on the selected Z-score and uses background gradients to highlight extreme market conditions, improving visual clarity.

​

How it Works 

The "Bitcoin Valuation Model | Opus" calculates Z-scores for a variety of indicators, each designed to capture distinct aspects of Bitcoin’s market dynamics. These Z-scores are derived using user-defined parameters for smoothing, mean, and scale, offering flexibility for different trading strategies. Below is an overview of the indicators and their roles:

Fundamental Indicators:

• MVRV (Market Value to Realized Value): Evaluates whether Bitcoin is overvalued or undervalued compared to its realized price, using on-chain data from IntoTheBlock.

• Bitcoin Thermocap: Assesses Bitcoin’s price relative to the cumulative cost of mining, normalized over time, starting from January 1, 2012.

• NUPL (Net Unrealized Profit/Loss): Measures the overall profit or loss of Bitcoin holders, sourced from Glassnode and CoinMetrics data.

• CVDD (Cumulative Value Days Destroyed): Analyzes coin age destruction to infer market tops and bottoms, incorporating volume and market cap data.

• SOPR (Spent Output Profit Ratio): Indicates whether spent coins are in profit or loss, providing insight into holder behavior.
   

Technical Indicators

• RSI (Relative Strength Index): Measures the speed and change of price movements to identify overbought or oversold conditions.

• CCI (Commodity Channel Index): Detects cyclical trends in Bitcoin’s price movements.

• Normalized Moving Averages: Combines multiple moving averages (SMA, EMA, WMA, Median, DEMA) to evaluate trend strength.

• Sharpe Ratio: Assesses risk-adjusted returns over a user-defined period.

• Pi Cycle: Uses long and short moving averages to detect potential market tops.

• NHPF (Normalized Hodrick-Prescott Filter): Applies a filter to separate trend and cycle components of Bitcoin’s price.

• VWAP (Volume-Weighted Average Price): Tracks the average price weighted by volume, reset daily.

Z-Score Calculation and Aggregation
Each indicator’s Z-score is calculated by normalizing its raw value against a subjective mean and scale, often smoothed with moving averages or other techniques. The indicator then computes three composite Z-scores:

• Fundamental Z-Score: Average of MVRV, Bitcoin Thermocap, NUPL, CVDD, and SOPR.

• Technical Z-Score: Average of RSI, CCI, Normalized Moving Averages, Sharpe Ratio, Pi Cycle, NHPF, and VWAP.

• Average Z-Score: Average of all twelve indicators.
   

Visualization
The indicator offers several visualization options:

• Plotted Lines and Areas: Users can plot a selected Z-score, with color gradients indicating overbought (pink) or oversold (cyan) conditions.

• Horizontal Lines: Reference thresholds at ±1, ±2, and ±3 to gauge the magnitude of Z-scores.

• Background Gradients: Highlight extreme conditions when Z-scores exceed user-defined thresholds (e.g., ±2), with dynamic opacity.

• Bar Coloring: Optionally colors price bars based on the selected Z-score for rapid visual reference.

• Table Display: A customizable table shows each indicator’s Z-score, market condition (e.g., "OverBought," "Slightly OS"), and ROC over a user-defined period (default 7 days), with fixed-width bars for Z-score magnitude.

Conclusion​
The "Bitcoin Full Cycle Valuation" is a robust tool for traders and analysts aiming to understand Bitcoin’s market dynamics through a data-driven lens. By aggregating and normalizing a diverse set of indicators into Z-scores, it offers a clear, comprehensive view of Bitcoin’s valuation—whether overvalued, undervalued, or fairly priced. Its customizable settings and rich visualizations make it adaptable to various trading styles, providing valuable insights for both short-term and long-term strategies.

​

Disclaimer

This indicator is provided for informational and educational purposes only and does not constitute financial advice. Trading cryptocurrencies involves significant risk, and users should conduct their own research and analysis before making decisions. The creator of this indicator is not responsible for any financial losses or gains resulting from its use.