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 open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.