BTC Fundamental Value Hypothesis [OmegaTools]BTC Fundamental Value Hypothesis is a macro-valuation and regime-detection model designed to contextualize Bitcoin’s price through relative market-cap comparisons against major capital reservoirs: Gold, Silver, the Altcoin market, and large-cap equities. Instead of relying on traditional on-chain metrics or purely technical signals, this tool frames BTC as an asset competing for global liquidity and “store-of-value mindshare”, then estimates an implied fair value based on how BTC historically coexists (or diverges) from these benchmark universes.
Core concept: relative market-cap anchoring
The indicator builds a reference-based fair price by translating external market capitalizations into implied BTC valuation using a dominance framework. In practice, you choose one or more reference universes (Gold, Silver, Altcoins, Stocks). For each selected universe, the script computes how large BTC “should be” relative to that universe (dominance ratio), and converts that into an implied BTC price. The final fair price is the average of the implied prices from the enabled universes.
Two dominance modes: automatic vs manual
1. Automatic Dominance % (default)
When enabled, the model estimates dominance ratios dynamically using a 252-period simple moving average of BTC market cap divided by each reference market cap. This produces an adaptive baseline that follows structural changes over time and reduces sensitivity to short-term spikes.
2. Manual Dominance %
If you prefer a discretionary macro thesis, you can directly input dominance parameters for each reference universe. This is useful when you want to stress-test scenarios (e.g., “BTC should converge toward X% of Gold’s market cap”) or align the model with a specific long-term adoption narrative.
Reference universes and data construction
- BTC market cap: pulled from CRYPTOCAP:BTC.
- Gold and Silver market caps: derived from the corresponding futures symbols (GC1!, SI1!) multiplied by an assumed total above-ground quantity (constant tonnage converted to troy ounces). This provides a practical and tradable proxy for spot valuation context.
- Altcoin market cap: pulled from CRYPTOCAP:TOTAL2 (total crypto market excluding BTC).
- Stocks market cap proxy (Σ3): a deliberately conservative equity benchmark built from three mega-cap stocks (AAPL, MSFT, AMZN) using total shares outstanding (request.financial) multiplied by price. This avoids index licensing complexity while still tracking a meaningful slice of global equity beta/liquidity.
Valuation output: overvalued vs undervalued (log-based)
The valuation readout is expressed as a percentage derived from the logarithmic distance between BTC price and the model’s fair price. This choice makes valuation comparable across long time horizons and reduces distortion during exponential growth phases. A positive valuation indicates BTC trading below the model’s implied value (undervalued), while a negative valuation indicates trading above it (overvalued).
Oscillator: relative momentum and regime confirmation
In addition to fair value, the indicator includes a momentum differential oscillator built from RSI(50):
- BTC RSI is compared to the average RSI of the selected reference universes.
- The oscillator highlights when BTC strength is leading or lagging the broader macro benchmarks.
- Color is rendered through a gradient to provide immediate regime readability (risk-on vs risk-off behavior, expansion vs contraction phases).
Visualization and UI components
- Fair Price overlay: the computed fair price is plotted directly on the BTC chart for immediate comparison with spot price action.
- Valuation shading: the area between price and fair price is filled to visually emphasize dislocation and potential mean-reversion zones.
- Oscillator panel: a zero-centered oscillator with filled bands helps you identify persistent trend regimes versus transitional conditions.
- Summary table: a right-side table displays the current valuation (over/under) and, when Automatic mode is enabled, the live dominance ratios used in the model (BTC/GOLD, BTC/SILVER, BTC/ALTC, BTC/STOCKS).
How to use it (practical workflows)
- Macro valuation context: use fair price as a structural anchor to assess whether BTC is trading at a premium or discount relative to external liquidity baselines.
- Regime filtering: combine valuation with the oscillator to distinguish “cheap but weak” from “cheap and strengthening” (and the inverse for tops).
- Mean-reversion mapping: large, persistent deviations from fair value often highlight speculative extremes or capitulation zones; this can support systematic entries/exits, position sizing, or hedging decisions.
- Scenario analysis: switch to Manual Dominance % to model adoption outcomes, policy-driven shifts, or multi-year re-rating assumptions.
Important notes and limitations (read before use)
- This is a hypothesis-driven macro model, not a literal intrinsic value calculation. Results depend on dominance assumptions, proxies, and data availability.
- Gold/Silver market caps are approximations based on futures pricing and fixed supply constants; real-world supply dynamics, above-ground estimates, and spot/futures basis can differ.
- The Stocks (Σ3) benchmark is a proxy and intentionally not “the whole market”. It is designed to represent a large-cap liquidity reference, not total equity capitalization.
- Always validate signals with additional context (market structure, volatility regime, risk management rules). This indicator is best used as a macro layer in a broader decision framework.
Designed for clarity, macro discipline, and repeatability
BTC Fundamental Value Hypothesis by OmegaTools is built for traders and investors who want a clean, data-driven way to interpret BTC through the lens of competing asset classes and capital flows. It is particularly effective on higher timeframes (Daily/Weekly) where macro relationships are more stable and valuation signals are less noisy.
© OmegaTools, Eros
Fairprice
Price & Volume Profile (Expo)█ Overview
The Price & Volume Profile provides a holistic perspective on market dynamics by simultaneously tracking price action and trading volume across a range of price levels. So it is not only a volume-based indicator but also a price-based one. In addition to illustrating volume distribution, it quantifies how frequently the price has fallen within a particular range, thus offering a holistic perspective on market dynamics.
This unique and comprehensive approach to market analysis by considering both price action and trading volume, two crucial dimensions of market activity. Its distinctive methodology offers several advantages:
Holistic Market View: By simultaneously tracking the frequency of specific price ranges (Price Profile) and the volume traded at those ranges (Volume Profile), this indicator provides a more complete picture of market behavior. It shows not only where the market is trading but also how much it's trading, reflecting both price acceptance levels and market participation intensity.
Point of Control (POC): The POC, as highlighted by this indicator, serves as a significant reference point for traders. It identifies the price level with the highest trading activity, thus indicating a strong consensus among market participants about the asset's fair value. Observing how price interacts with the POC can offer valuable insights into market sentiment and potential trend reversals.
Support and Resistance Levels: Price levels with high trading activity often act as support or resistance in future price movements. The indicator visually represents these levels, enabling traders to anticipate potential price reactions.
Price Profile
Price and Volume Profile
█ Calculations
The algorithm analyzes both trade frequency and volume across different price levels. It identifies these levels within the visible chart range, then examines each bar to determine if the selected price falls within these levels. If so, it increases a counter and adds the trading volume. This process repeats across the visible range and is visualized as a horizontal histogram, each bar representing a price level and the bar length reflecting trade frequency and volume. Additionally, it calculates the Point of Control (POC), signifying the price level with the highest activity.
In summary: The histogram presents a dual perspective - not only the traded volume at each price level but also the frequency of the price hitting each range. The longer the bar, the more times the price has frequented that specific range, revealing key insights into price behavior and acceptance levels. These frequently visited areas often emerge as strong support or resistance zones, helping traders navigate market movements.
Please note that the indicator adjusts to the visible price range, making it adaptable to changing market conditions. This dynamic analysis can provide more relevant and timely information than static indicators.
█ How to use
This indicator is beneficial for traders as it offers insights into the distribution of trading activity across different price levels. It helps identify key areas of support and resistance and gives a visual representation of market sentiment and liquidity.
The point of control (POC) , which is the price level with the highest traded volume or frequency count, becomes even more crucial in this context. It marks the price at which the most trading activity occurred, signaling a strong consensus among market participants about the asset's fair value. If the market price deviates significantly from the POC, it could suggest an overbought or oversold condition, potentially leading to a price reversion.
Fair Price Areas/gaps are specific price levels or zones where an asset has spent limited time in the past. These areas are considered interesting or significant because they may have an impact on future price action.
Similar to the concept of fair value gaps, which refers to discrepancies between an asset's market price and its estimated intrinsic value, Fair Price Areas/gaps focus on price levels that have been relatively underutilized in terms of trading activity. When an asset's price reaches a Fair Price Area/gap, traders and investors pay attention because they expect the price to react in some way. The rationale behind this concept is that price tends to gravitate towards areas where it has spent less time in the past, as the market perceives them as significant levels.
█ Settings
The indicator is customizable, allowing users to define the number of price levels (rows), the offset, the data source, and whether to display volume or frequency count. It also adjusts dynamically to the visible price range on the chart, ensuring that the analysis remains relevant and timely with changing market conditions.
Source: The price to use for the calculation. Typically, this is the closing price. By considering the user-selected Source (typically the closing price), the indicator determines the frequency with which the price lands within each designated price level (row) over the selected period. In essence, the indicator provides a count of bars where the Source price falls within each range, essentially creating a "Price Profile."
Row Size: The number of price levels (rows) to divide the visible price range into.
Display: Choose whether to display the number of bars ("Counter") or the total volume ("Volume") for each price level.
Offset: The distance of the histogram from the price chart.
Point of Control (POC): If enabled, the indicator will highlight the price level with the most activity.
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Disclaimer
The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
Fair Price [XSfera]The indicator allows you to quickly compare business growth rates (by default, earnings per share, EPS) and stock prices to determine overbought or undervalued.
The financial parameter as a percentage fits together several years ago, by default 5, and displays the dynamics. To date, it allows you to see how much the price is higher or lower than fair. The lag in the share price from the growth rate of the business is often called the margin of safety, which makes it safer to invest. Of course, this does not mean that the market will quickly return to a fair course, the market can live its life for a long time.
It is important that the dynamics will be incorrect if the financial parameter at the beginning of the docking is negative, for example, as in TSLA and not very correct in the case of a low base, i.e. when the company only went into profit 5 years ago.
Индикатор позволяет быстро сравнить темпы роста бизнеса (по-умолчанию прибыль на акцию, EPS ) и цены акции, для определения перекупленности или недооценки.
Финансовый параметр в процентном соотношении стыкуется несколько лет назад, по-умолчанию 5, и отображает динамику. На сегодняшний день позволяет увидеть насколько цена выше или ниже справедливой. Отставание цены акции от темпов роста бизнеса, часто называют маржой безопастности, которая позволяет безопаснее инвестировать. Само собой это не значит что рынок быстро вернется в справедливое русло, рынок может долгое время жить своей жизнью.
Важно что динамика будет неверной если финансовый параметр на начало стыковки будет отрицательным, например как в TSLA и не очень корректным в случае низкой базы, т.е. когда компания только только 5 лет назад вышла в прибыль.
