On-Chain Signal Map
The On-Chain Signal Map provides a comprehensive view of 13 key Bitcoin on-chain indicators, displaying their signals in a heatmap format alongside Bitcoin price movements. Each component represents a different on-chain metric that helps assess market conditions.
Understanding the On-Chain Signal Map
What is the On-Chain Signal Map?
The On-Chain Signal Map aggregates 13 different Bitcoin on-chain indicators into a single visualization. Each indicator is analyzed using a 60-period moving average and an expanding mean to determine its current signal classification. The heatmap format allows for quick visual assessment of market conditions across multiple metrics simultaneously.
Signal Classification System
Each indicator is classified into one of five signal types based on its relationship to both its moving average and mean value:
- Positive (Dark Green): Indicator value is above both its mean and moving average, suggesting strong bullish conditions
- Slight Positive (Light Green): Indicator is below mean but above moving average, suggesting moderately bullish conditions
- Neutral (Gray): Default state when conditions don't meet other criteria
- Slight Negative (Light Red): Indicator is above mean but below moving average, suggesting moderately bearish conditions
- Negative (Dark Red): Indicator value is below both its mean and moving average, suggesting strong bearish conditions
The 13 Components
The map tracks 13 distinct on-chain indicators, each providing unique insights into Bitcoin market dynamics. These components are anonymized as "Component 1-13" to focus on the aggregate signal patterns rather than individual metric values. The indicators cover various aspects including:
- Market value metrics and profitability ratios
- Cycle position indicators
- Network valuation models
- Risk assessment metrics
- Macro-economic indicators
How to Use This Indicator
The On-Chain Signal Map is most effective when viewing the aggregate pattern of signals rather than focusing on individual components:
- Bullish Confluence: When multiple components show positive (dark green) signals simultaneously, it suggests strong on-chain support for higher prices
- Bearish Confluence: When multiple components show negative (dark red) signals, it suggests on-chain conditions favor lower prices
- Mixed Signals: A diverse distribution of signal types often occurs during transitional market phases or consolidation periods
- Signal Transitions: Watch for periods when many components shift from one signal type to another, as these can indicate changing market regimes
Signal Interpretation
Extreme Readings: When 10 or more components show the same signal type (all positive or all negative), it typically indicates an extreme market condition. These periods often coincide with major market tops or bottoms.
Divergences: Pay attention to situations where Bitcoin price moves in one direction while the signal map moves in the opposite direction. For example, if price is making new highs but fewer components are showing positive signals, it may indicate weakening momentum.
Historical Context: Use the time range filters to analyze how signal patterns evolved during previous market cycles. Understanding historical signal distributions at different cycle stages can provide valuable context for current readings.