OPEN-SOURCE SCRIPT
Bitcoin Liquidity Wave
BTC Liquidity Wave
What it does
This indicator values Bitcoin against global central bank liquidity instead of against calendar time or halving cycles. It draws a liquidity based baseline, a wave that shifts above or below that baseline as liquidity accelerates or contracts, and a channel around the wave that narrows as Bitcoin matures. It also projects the model forward, using liquidity data that is already published for the first part of the projection.
The liquidity index
The script builds a global liquidity index in US dollars from eleven series:
Fed total assets minus the Treasury General Account minus overnight reverse repo, plus the balance sheets of the ECB, the Bank of Japan, the People's Bank of China and the Bank of England, each converted to dollars at the spot rate. Every component can be switched off in the settings. The index is expressed in trillions of dollars.
How the model works
Baseline (green): the log of price is modeled as a function of the log of the liquidity index, read with a 60 day lead, plus a time term with curvature. Time stands in for adoption; the curvature term lets the growth rate slow as the asset ages. Liquidity enters with an exponent of about 1.5, so a doubling of the index corresponds to roughly a 2.8x change in the baseline, all else equal.
Wave (magenta): the baseline is shifted by a liquidity impulse, defined as the smoothed 270 day change in the log of the index, applied with a 90 day lead. When liquidity has been expanding, the wave rides above the baseline; when it has been contracting, it sits below. Because the impulse uses a lead, the next 90 days of the wave are determined by liquidity that has already been reported.
Channel: the outer levels are the wave multiplied and divided by an envelope that shrinks with the age of the asset. The upper envelope decays faster than the lower one, which matches the observation that upside overshoots have compressed far more than downside ones. Inner levels sit halfway between the wave and the outer levels.
Projection: for the first 60 to 90 days the projection uses liquidity that is already known. Beyond that the index is extended at its trailing three year growth rate by default, or at a fixed rate you choose, so you can compare a tightening scenario with an easing scenario. A dashed vertical line marks where published data ends.
How to read it
Load the script on a daily Bitcoin chart, for example INDEX:BTCUSD. It also works on weekly charts, since every lookback is converted from days to bars.
Green is the liquidity baseline. Magenta is the baseline adjusted for the current liquidity impulse. The colored bands around the wave are the channel; the background turns green when price touches the lower outer level and red when it touches the upper one. Optional extras in the settings include the baseline channel with its sub levels and shading, markers where the liquidity impulse crosses zero, and a mode that paints the close by its position inside the baseline channel.
The Fit group exposes every coefficient. They were estimated by least squares on daily data from mid 2012 to September 2026, then the envelope was scaled to the cycle extremes over that period. Changing them changes the model; the defaults are the fitted values.
What is original here
The concept of drawing a trend with colored bands around it is a well known family of Bitcoin charts. This script differs in what drives the lines. The baseline is not a function of time alone: liquidity is inside the valuation equation, the wave is generated by measured liquidity momentum rather than by a fixed sine cycle, the channel decays with age instead of using fixed multipliers, and the projection is fed by real liquidity data before it switches to an assumed growth rate. All code was written from scratch for this indicator.
Limitations
This is a descriptive model fitted to past data. The coefficients were chosen after the fact and will not necessarily hold in the future. The projection is a scenario, not a forecast; its later part depends entirely on the growth rate you assume for liquidity. Foreign balance sheets are converted at spot exchange rates, so part of what the index measures is the strength of the dollar. Nothing here is financial advice.
What it does
This indicator values Bitcoin against global central bank liquidity instead of against calendar time or halving cycles. It draws a liquidity based baseline, a wave that shifts above or below that baseline as liquidity accelerates or contracts, and a channel around the wave that narrows as Bitcoin matures. It also projects the model forward, using liquidity data that is already published for the first part of the projection.
The liquidity index
The script builds a global liquidity index in US dollars from eleven series:
Fed total assets minus the Treasury General Account minus overnight reverse repo, plus the balance sheets of the ECB, the Bank of Japan, the People's Bank of China and the Bank of England, each converted to dollars at the spot rate. Every component can be switched off in the settings. The index is expressed in trillions of dollars.
How the model works
Baseline (green): the log of price is modeled as a function of the log of the liquidity index, read with a 60 day lead, plus a time term with curvature. Time stands in for adoption; the curvature term lets the growth rate slow as the asset ages. Liquidity enters with an exponent of about 1.5, so a doubling of the index corresponds to roughly a 2.8x change in the baseline, all else equal.
Wave (magenta): the baseline is shifted by a liquidity impulse, defined as the smoothed 270 day change in the log of the index, applied with a 90 day lead. When liquidity has been expanding, the wave rides above the baseline; when it has been contracting, it sits below. Because the impulse uses a lead, the next 90 days of the wave are determined by liquidity that has already been reported.
Channel: the outer levels are the wave multiplied and divided by an envelope that shrinks with the age of the asset. The upper envelope decays faster than the lower one, which matches the observation that upside overshoots have compressed far more than downside ones. Inner levels sit halfway between the wave and the outer levels.
Projection: for the first 60 to 90 days the projection uses liquidity that is already known. Beyond that the index is extended at its trailing three year growth rate by default, or at a fixed rate you choose, so you can compare a tightening scenario with an easing scenario. A dashed vertical line marks where published data ends.
How to read it
Load the script on a daily Bitcoin chart, for example INDEX:BTCUSD. It also works on weekly charts, since every lookback is converted from days to bars.
Green is the liquidity baseline. Magenta is the baseline adjusted for the current liquidity impulse. The colored bands around the wave are the channel; the background turns green when price touches the lower outer level and red when it touches the upper one. Optional extras in the settings include the baseline channel with its sub levels and shading, markers where the liquidity impulse crosses zero, and a mode that paints the close by its position inside the baseline channel.
The Fit group exposes every coefficient. They were estimated by least squares on daily data from mid 2012 to September 2026, then the envelope was scaled to the cycle extremes over that period. Changing them changes the model; the defaults are the fitted values.
What is original here
The concept of drawing a trend with colored bands around it is a well known family of Bitcoin charts. This script differs in what drives the lines. The baseline is not a function of time alone: liquidity is inside the valuation equation, the wave is generated by measured liquidity momentum rather than by a fixed sine cycle, the channel decays with age instead of using fixed multipliers, and the projection is fed by real liquidity data before it switches to an assumed growth rate. All code was written from scratch for this indicator.
Limitations
This is a descriptive model fitted to past data. The coefficients were chosen after the fact and will not necessarily hold in the future. The projection is a scenario, not a forecast; its later part depends entirely on the growth rate you assume for liquidity. Foreign balance sheets are converted at spot exchange rates, so part of what the index measures is the strength of the dollar. Nothing here is financial advice.
Script open-source
Dans l'esprit TradingView, le créateur de ce script l'a rendu open source afin que les traders puissent examiner et vérifier ses fonctionnalités. Bravo à l'auteur! Bien que vous puissiez l'utiliser gratuitement, n'oubliez pas que la republication du code est soumise à nos Règles.
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Script open-source
Dans l'esprit TradingView, le créateur de ce script l'a rendu open source afin que les traders puissent examiner et vérifier ses fonctionnalités. Bravo à l'auteur! Bien que vous puissiez l'utiliser gratuitement, n'oubliez pas que la republication du code est soumise à nos Règles.
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.