Index history by category

Heatmap of the daily score since 2011 of the five categories of the Is BTC Cheap? index (on-chain valuation, cycle, liquidity, sentiment and technical) and what each one showed at Bitcoin's cycle tops and bottoms.

What does the category history show?

The index score combines five categories, each scored from 0 (cheap) to 100 (expensive) by comparing it with its own history. Seeing them together over time shows what was driving the score at each moment: whether the price was expensive because of its on-chain valuation, the point in the cycle, global liquidity or market sentiment.

What did they show at tops and bottoms?

At the 2015, 2018 and 2022 bottoms, on-chain valuation was between 1 and 7 and technical between 0 and 5, with the 1-day score around 8-9. At the 2013, 2017 and 2021 tops it was the opposite: valuation between 78 and 100, technical between 91 and 98 and cycle above 80, with the score between 84 and 98. These are the categories that have best marked the extremes.

Why does liquidity run against the grain?

At the 2015, 2018 and 2022 bottoms, liquidity was in expensive territory (between 85 and 93): those bear markets coincided with tightening global liquidity, with rate hikes, withdrawal of stimulus or a strong dollar. Liquidity does not mark the extremes well, but it does help anticipate the following year; that is why it weighs little on short timeframes and more on the monthly one.