OPEN-SOURCE SCRIPT
Global Liquidity + BTC Divergence
This Pine Script is essentially creating a:
“Global USD Liquidity vs BTC Price” divergence monitoring indicator.
The core idea is:
In theory:
Global liquidity ↑
BTC should also ↑
If the two move inconsistently,
that creates a “divergence.”
This is a very common macro trading framework.
---
# What This Indicator Measures
It combines:
| Data | Meaning |
| ----- | ----------------------------- |
| WALCL | Federal Reserve balance sheet |
| TGA | U.S. Treasury General Account |
| RRP | Reverse Repo |
| BTC | Bitcoin price |
into:
“Net USD Liquidity”
Then compares it against Bitcoin price.
---
# Overall Logic Flow
Indicator workflow:
Federal Reserve data
↓
Calculate net liquidity
↓
Normalize values
↓
Normalize BTC
↓
Calculate divergence
↓
EMA smoothing
↓
Visualization
---
# Part 1: Getting Macro Data
Code:
```pine
walcl = request.security("FRED:WALCL", "W", close)
tga = request.security("FRED:WTREGEN", "W", close)
rrp = request.security("FRED:RRPONTSYD", "W", close)
```
The data comes from:
Federal Reserve Economic Data (FRED)
---
# What Is WALCL?
# WALCL
Total assets held by the Federal Reserve
Including:
* QE
* Treasury bonds
* MBS
When it rises:
it generally means the Fed is injecting liquidity.
Usually:
risk assets tend to rise.
---
# What Is TGA?
# Treasury General Account
The U.S. Treasury’s account at the Federal Reserve
You can think of it as:
money parked by the Treasury at the Fed.
When TGA rises:
market liquidity gets drained.
Because funds move back into the Treasury account.
That’s why it is subtracted.
---
# What Is RRP?
Reverse Repo
This is:
the Fed absorbing liquidity from the market.
When RRP rises:
market liquidity decreases.
So it is also subtracted.
---
# The Real Net Liquidity Formula
Core formula:
```pine
liq = walcl - tga - rrp
```
This is essentially:
Net Liquidity
Many macro traders use this exact framework.
---
# Part 2: Getting BTC Data
```pine
btc = request.security("BINANCE:BTCUSDT", "W", close)
```
This pulls:
* Binance
* BTCUSDT
* Weekly timeframe
---
# Part 3: Normalization
This is one of the most important parts of the indicator.
---
# Why Normalize?
Because:
| Data | Value Range |
| --------- | ----------------- |
| Liquidity | Trillions |
| BTC | Tens of thousands |
They cannot be compared directly.
So the script compresses both into a 0–1 range.
---
# Normalization Formula
```pine
(value - low) / (high - low)
```
Result:
Lowest value = 0
Highest value = 1
This allows:
* The liquidity curve
* The BTC curve
to be overlaid and compared visually.
---
# Part 4: Divergence
Core logic:
```pine
divergence = liqNorm - btcNorm
```
Meaning:
---
## If > 0
Liquidity is stronger than BTC.
This suggests:
BTC may be undervalued.
Liquidity has already increased,
but BTC has not followed yet.
Many traders interpret this as:
potential upside catch-up.
Green bars.
---
## If < 0
BTC has risen too aggressively.
It is outperforming liquidity support.
This may indicate:
an overheated market.
Macro traders often interpret this as:
potential pullback risk.
Red bars.
---
# EMA Section
```pine
liqEma = ta.ema(liqNorm, emaLen)
btcEma = ta.ema(btcNorm, emaLen)
```
Here:
the EMA is calculated,
but never plotted.
So currently:
it has no practical effect.
It was probably intended for:
* smoothing
* trend analysis
but was not fully implemented.
---
# Chart Explanation
---
# Green Line
Liquidity
Global liquidity
---
# Orange Line
BTC price
---
# Histogram Bars
Divergence value
---
# Green Background
Liquidity > BTC
This implies:
a bullish environment.
---
# Red Background
BTC > Liquidity
This implies:
a potentially overheated market.
---
# What This Indicator Is Good For
Very suitable for:
| Scenario | Suitability |
| ------------------------ | ----------- |
| Macro trend analysis | Excellent |
| Weekly timeframe | Excellent |
| Long-term BTC investing | Very good |
| Bull/bear cycle analysis | Very good |
| Short-term trading | Poor |
| High-frequency trading | Poor |
---
# Core Philosophy of the Indicator
The fundamental idea is:
BTC is largely driven by USD liquidity over the long term.
Meaning:
Fed liquidity injections
→ Risk assets rise
→ BTC rises
Many institutions:
* Global Macro funds
* Crypto hedge funds
* Liquidity-focused traders
use very similar models.
---
# But This Indicator Has Several Limitations
---
# 1. The Data Is Weekly
You used:
```pine
"W"
```
Which means:
updates are slow.
This is only suitable for higher timeframes.
---
# 2. BTC Is Not Driven Only by Liquidity
BTC is also influenced by:
* ETFs
* Halving cycles
* Leverage
* Stablecoins
* Market sentiment
* Regulation
---
# 3. Normalization Can Distort Reality
0–1 normalization:
only shows relative positioning,
not absolute valuation.
---
# 4. No Lead/Lag Modeling
In reality:
liquidity changes often lead BTC by several weeks or months.
But here:
they are compared simultaneously.
This reduces accuracy.
Professional models often:
shift liquidity forward.
For example:
```pine
liqShift = liqNorm[10]
```
Meaning:
liquidity leads BTC by 10 weeks.
---
# Professional Upgrade Ideas
You can improve this model further by adding:
---
## 1. Lead-Lag Analysis
Most important upgrade.
---
## 2. Global Central Banks
Not just the Fed:
* ECB
* BOJ
* PBOC
---
## 3. DXY
The U.S. Dollar Index is extremely important.
---
## 4. Stablecoin Supply
Such as:
* USDT
* USDC
---
## 5. Global M2
Global money supply.
---
# Who This Indicator Is Best For
Suitable for:
* Macro traders
* Long-term BTC investors
* Cycle analysis
* Liquidity research
* Crypto macro strategies
Not suitable for:
* High-frequency trading
* Intraday trading
* Scalping
---
# One-Sentence Summary
This indicator is essentially asking:
“Is BTC’s current price action supported by global USD liquidity?”
If:
Liquidity is strong
BTC is weak
Then:
BTC may eventually catch up higher.
If:
BTC is far stronger than liquidity
Then:
the market may be overheating.
“Global USD Liquidity vs BTC Price” divergence monitoring indicator.
The core idea is:
In theory:
Global liquidity ↑
BTC should also ↑
If the two move inconsistently,
that creates a “divergence.”
This is a very common macro trading framework.
---
# What This Indicator Measures
It combines:
| Data | Meaning |
| ----- | ----------------------------- |
| WALCL | Federal Reserve balance sheet |
| TGA | U.S. Treasury General Account |
| RRP | Reverse Repo |
| BTC | Bitcoin price |
into:
“Net USD Liquidity”
Then compares it against Bitcoin price.
---
# Overall Logic Flow
Indicator workflow:
Federal Reserve data
↓
Calculate net liquidity
↓
Normalize values
↓
Normalize BTC
↓
Calculate divergence
↓
EMA smoothing
↓
Visualization
---
# Part 1: Getting Macro Data
Code:
```pine
walcl = request.security("FRED:WALCL", "W", close)
tga = request.security("FRED:WTREGEN", "W", close)
rrp = request.security("FRED:RRPONTSYD", "W", close)
```
The data comes from:
Federal Reserve Economic Data (FRED)
---
# What Is WALCL?
# WALCL
Total assets held by the Federal Reserve
Including:
* QE
* Treasury bonds
* MBS
When it rises:
it generally means the Fed is injecting liquidity.
Usually:
risk assets tend to rise.
---
# What Is TGA?
# Treasury General Account
The U.S. Treasury’s account at the Federal Reserve
You can think of it as:
money parked by the Treasury at the Fed.
When TGA rises:
market liquidity gets drained.
Because funds move back into the Treasury account.
That’s why it is subtracted.
---
# What Is RRP?
Reverse Repo
This is:
the Fed absorbing liquidity from the market.
When RRP rises:
market liquidity decreases.
So it is also subtracted.
---
# The Real Net Liquidity Formula
Core formula:
```pine
liq = walcl - tga - rrp
```
This is essentially:
Net Liquidity
Many macro traders use this exact framework.
---
# Part 2: Getting BTC Data
```pine
btc = request.security("BINANCE:BTCUSDT", "W", close)
```
This pulls:
* Binance
* BTCUSDT
* Weekly timeframe
---
# Part 3: Normalization
This is one of the most important parts of the indicator.
---
# Why Normalize?
Because:
| Data | Value Range |
| --------- | ----------------- |
| Liquidity | Trillions |
| BTC | Tens of thousands |
They cannot be compared directly.
So the script compresses both into a 0–1 range.
---
# Normalization Formula
```pine
(value - low) / (high - low)
```
Result:
Lowest value = 0
Highest value = 1
This allows:
* The liquidity curve
* The BTC curve
to be overlaid and compared visually.
---
# Part 4: Divergence
Core logic:
```pine
divergence = liqNorm - btcNorm
```
Meaning:
---
## If > 0
Liquidity is stronger than BTC.
This suggests:
BTC may be undervalued.
Liquidity has already increased,
but BTC has not followed yet.
Many traders interpret this as:
potential upside catch-up.
Green bars.
---
## If < 0
BTC has risen too aggressively.
It is outperforming liquidity support.
This may indicate:
an overheated market.
Macro traders often interpret this as:
potential pullback risk.
Red bars.
---
# EMA Section
```pine
liqEma = ta.ema(liqNorm, emaLen)
btcEma = ta.ema(btcNorm, emaLen)
```
Here:
the EMA is calculated,
but never plotted.
So currently:
it has no practical effect.
It was probably intended for:
* smoothing
* trend analysis
but was not fully implemented.
---
# Chart Explanation
---
# Green Line
Liquidity
Global liquidity
---
# Orange Line
BTC price
---
# Histogram Bars
Divergence value
---
# Green Background
Liquidity > BTC
This implies:
a bullish environment.
---
# Red Background
BTC > Liquidity
This implies:
a potentially overheated market.
---
# What This Indicator Is Good For
Very suitable for:
| Scenario | Suitability |
| ------------------------ | ----------- |
| Macro trend analysis | Excellent |
| Weekly timeframe | Excellent |
| Long-term BTC investing | Very good |
| Bull/bear cycle analysis | Very good |
| Short-term trading | Poor |
| High-frequency trading | Poor |
---
# Core Philosophy of the Indicator
The fundamental idea is:
BTC is largely driven by USD liquidity over the long term.
Meaning:
Fed liquidity injections
→ Risk assets rise
→ BTC rises
Many institutions:
* Global Macro funds
* Crypto hedge funds
* Liquidity-focused traders
use very similar models.
---
# But This Indicator Has Several Limitations
---
# 1. The Data Is Weekly
You used:
```pine
"W"
```
Which means:
updates are slow.
This is only suitable for higher timeframes.
---
# 2. BTC Is Not Driven Only by Liquidity
BTC is also influenced by:
* ETFs
* Halving cycles
* Leverage
* Stablecoins
* Market sentiment
* Regulation
---
# 3. Normalization Can Distort Reality
0–1 normalization:
only shows relative positioning,
not absolute valuation.
---
# 4. No Lead/Lag Modeling
In reality:
liquidity changes often lead BTC by several weeks or months.
But here:
they are compared simultaneously.
This reduces accuracy.
Professional models often:
shift liquidity forward.
For example:
```pine
liqShift = liqNorm[10]
```
Meaning:
liquidity leads BTC by 10 weeks.
---
# Professional Upgrade Ideas
You can improve this model further by adding:
---
## 1. Lead-Lag Analysis
Most important upgrade.
---
## 2. Global Central Banks
Not just the Fed:
* ECB
* BOJ
* PBOC
---
## 3. DXY
The U.S. Dollar Index is extremely important.
---
## 4. Stablecoin Supply
Such as:
* USDT
* USDC
---
## 5. Global M2
Global money supply.
---
# Who This Indicator Is Best For
Suitable for:
* Macro traders
* Long-term BTC investors
* Cycle analysis
* Liquidity research
* Crypto macro strategies
Not suitable for:
* High-frequency trading
* Intraday trading
* Scalping
---
# One-Sentence Summary
This indicator is essentially asking:
“Is BTC’s current price action supported by global USD liquidity?”
If:
Liquidity is strong
BTC is weak
Then:
BTC may eventually catch up higher.
If:
BTC is far stronger than liquidity
Then:
the market may be overheating.
Script de código abierto
Fiel al espíritu de TradingView, el creador de este script lo ha convertido en código abierto, para que los traders puedan revisar y verificar su funcionalidad. ¡Enhorabuena al autor! Aunque puede utilizarlo de forma gratuita, recuerde que cualquier republicación del código está sujeta a nuestras Normas internas.
Exención de responsabilidad
La información y las publicaciones no constituyen, ni deben considerarse como, asesoramiento o recomendaciones financieras, de inversión, de trading u otro tipo, proporcionadas o respaldadas por TradingView. Obtenga más información en Condiciones de uso.
Script de código abierto
Fiel al espíritu de TradingView, el creador de este script lo ha convertido en código abierto, para que los traders puedan revisar y verificar su funcionalidad. ¡Enhorabuena al autor! Aunque puede utilizarlo de forma gratuita, recuerde que cualquier republicación del código está sujeta a nuestras Normas internas.
Exención de responsabilidad
La información y las publicaciones no constituyen, ni deben considerarse como, asesoramiento o recomendaciones financieras, de inversión, de trading u otro tipo, proporcionadas o respaldadas por TradingView. Obtenga más información en Condiciones de uso.