This confluence indicator is designed to aide with identification of Bitcoin market extremes. It tracks the degree to which four popular cyclical on-chain oscillators have diverged from their respective long-term means, both to the upside, or the downside. The position of each oscillator is compared to its all-time-average, with thresholds set for what classifies as a statistically significant deviation (typically ±0.8 to ±1.0 standard deviation).

The signal is designed to take a 7D-EMA of the binary result returned from four oscillators:

1) 🟢 MVRV Ratio indicating Unrealized Profit/Loss held by the market is at an extreme level.

2) 🟡 aSOPR (30D-EMA) indicating that the Realized Profit/Loss multiple is at extreme levels.

3) 🔵 Puell Multiple indicating relative miner revenue (and thus profitability) has reached an extreme level.

4) 🔴 Reserve Risk Multiple indicating that the degree of HODLing taking place is at an extreme level.

Each indicator returns a binary 1, or -1, if an extreme level is reached, and the signal aggregates the result across the four inputs:

• Positive Values signal large deviations to the upside, typical of overheated bull market conditions.

• Negative Values signal large deviations to the downside, typical of deep bear market conditions.

• Larger Absolute Values indicating a larger count of signals have reached the defined deviation threshold.

Hint: When a larger number of indicator signals align at the same time (confluence), it suggests a greater probability that the Bitcoin market is currently at a cycle extreme.