Bitcoin Signal Desk

Daily macro snapshot focused on liquidity, rates, dollar strength, and risk appetite.

Inspired by @Globalflows macro framework

Macro Regime 3-month lookback
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Risk: -- Updated: --
Top Drivers (3M)

Bitcoin acts as a macro liquidity release valve. It rises when the quantity of money increases and falls when liquidity contracts. It responds to real interest rates, becoming more attractive when real rates fall. It moves furthest when macro liquidity expands, because excess capital flows outward along the risk curve โ€” from safe assets to risky ones โ€” until it reaches bitcoin at the far end.

This is why bitcoin behaves like a high-beta macro asset rather than a traditional safe haven. These dynamics happen in sequence, so instead of letting every metric "vote equally," we respect that transmission order.

A note for Bitcoiners: While we believe bitcoin is fundamentally a risk-off asset โ€” sound money with no counterparty risk โ€” the reality is that 99% of investors don't see it that way yet. This tool helps explain why bitcoin's price behaves the way it does today, as capital flows treat it as one of the riskiest assets on the curve. Understanding this doesn't mean accepting it forever โ€” just recognizing the game being played until bitcoin achieves broader recognition as a true safe haven.

๐Ÿ’ง Layer 1: Liquidity Primary Driver
"Is money entering or leaving the system?"

We track bank reserves, Fed balance sheet, reverse repo, and Treasury cash. If liquidity is expanding, more capital can flow into assets โ€” bitcoin has a tailwind. If contracting, capital gets pulled back.

Analogy: The fuel level in the tank.

๐Ÿ’ต Layer 2: Price of Money Primary Driver
"Even if money exists, is it cheap enough to take risk?"

We track real interest rates (most important โ€” 3x weighted), nominal yields, yield curve shape, and inflation expectations. Falling real rates encourage risk-taking; rising real rates favor safe yield over speculation.

Analogy: The price at the pump.

๐Ÿฆ Layer 3: Credit Constraint
"Can the system safely use leverage?"

We track credit spreads and funding stress. If credit is calm, liquidity flows smoothly along the risk curve to bitcoin. If credit is stressed, forced selling happens, leverage unwinds, and everything correlates down.

Key insight: Credit doesn't create bull markets โ€” it prevents crashes or allows them. Even supportive liquidity can fail during credit stress.

Analogy: The circuit breaker.

๐Ÿ“ˆ Layer 4: Risk Assets Confirmation
"Is capital flowing outward along the risk curve?"

We track SPY, QQQ/ARKK, and VIX. When liquidity expands, capital flows from safe assets โ†’ equities โ†’ speculative tech โ†’ bitcoin. Risk assets confirm this transmission is happening.

Key insight: Risk markets do NOT decide the regime โ€” they show whether capital is actually flowing along the curve.

Analogy: The speedometer.

๐ŸŒ Layer 5: FX Context
"Is global dollar liquidity tight or loose?"

We track the dollar index and USD/JPY. A strong dollar tightens global conditions; a weak dollar loosens them. FX supports or contradicts the macro picture but does not override it.

Analogy: Headwind or tailwind.

How Individual Metrics Are Scored
1
3-Month Lookback โ†’ Each metric is compared to its value 3 months ago. This window balances signal quality (80% win rate) with frequency โ€” it flags actionable regimes roughly half the time.
2
Direction Rules โ†’ Each metric has a rule determining if movement is Supportive or Restrictive (see weights table below).
3
Neutral Threshold โ†’ Small moves are filtered out. Rates/spreads need โ‰ฅ15bp change; all other metrics need โ‰ฅ2% change. Below threshold = Neutral.
4
EMA Smoothing โ†’ The weighted composite score is smoothed with a 21-day exponential moving average to filter daily noise. The regime flips only when the smoothed score crosses above +0.2 (Supportive) or below โˆ’0.2 (Restrictive). This prevents whipsaw from single-day spikes โ€” the signal needs sustained momentum to change.
Metric Weights

Key drivers receive higher weights based on their historical correlation with Bitcoin price movements.

Layer Metric Weight Supportive When
๐Ÿ’ง Liquidity Fed Balance Sheet (WALCL) 2ร— Rising โ†‘
๐Ÿ’ง Liquidity Bank Reserves (WRESBAL) 2ร— Rising โ†‘
๐Ÿ’ง Liquidity Reverse Repo (RRPONTSYD) 1ร— Falling โ†“
๐Ÿ’ง Liquidity Treasury General (WTREGEN) 1ร— Falling โ†“
๐Ÿ“Š Rates Real Yields (DFII10) 3ร— Falling โ†“
๐Ÿ“Š Rates 10Y Yield (DGS10) 1ร— Falling โ†“
๐Ÿ“Š Rates Yield Curve (T10Y2Y) 1ร— Steepening โ†‘
๐Ÿ“Š Rates Inflation Expectations (T5YIFR) 1ร— Rising โ†‘
๐Ÿฆ Credit HY Spreads (BAMLH0A0HYM2) 1.5ร— Tightening โ†“
๐Ÿฆ Credit IG Spreads (BAMLC0A0CM) 1ร— Tightening โ†“
๐ŸŽฏ Risk ARKK (Speculative Appetite) 1.5ร— Rising โ†‘
๐ŸŽฏ Risk SPY, QQQ 1ร— Rising โ†‘
๐ŸŽฏ Risk VIX 1ร— Falling โ†“
๐Ÿ’ฑ FX Dollar Index (DTWEXBGS) 1.5ร— Weakening โ†“
๐Ÿ’ฑ FX USD/JPY 1ร— Rising โ†‘
How the Overall Regime Is Calculated
1
Layer Scores โ†’ Weighted metrics within each layer are summed. Max scores: Liquidity ยฑ6, Rates ยฑ6, Credit ยฑ2.5, Risk ยฑ4.5, FX ยฑ2.5.
2
Layer Regime โ†’ Each layer is classified: Supportive (โ‰ฅ50% of max score), Restrictive (โ‰ค-50%), or Neutral (in between).
3
Liquidity + Rates โ†’ These primary drivers set the base regime. Both supportive = Supportive. Both restrictive = Restrictive. One leading = Supportive with note. Mixed = Neutral.
4
Credit Gate โ†’ If credit is Restrictive, Supportive regimes downgrade to Neutral with "Credit Fragile" flag. Liquidity can't flow if the pipes are broken.
5
Risk Confirmation โ†’ Risk layer shows if capital is actually flowing (Confirming) or if markets diverge from macro signals (Diverging). Does not change regime.
Detailed Layer Breakdown
๐Ÿ’ง Liquidity (Quantity of Money) 0
๐Ÿ“Š Price of Money (Rates) 0
๐Ÿฆ Credit & Funding Stress 0
๐ŸŽฏ Risk Curve Expression 0
๐Ÿ’ฑ FX / Global Liquidity 0
๐Ÿ“ž

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โš ๏ธ Not investment advice. Macro conditions are complex. Past correlations โ‰  future results.