Bitcoin Cycle Timing Model (BTC Market Heat Scoring System)

This skill helps you systematically assess where Bitcoin sits in its market cycle — from extreme fear (accumulation opportunity) to extreme greed (distribution/exit signal). Through a weighted evaluation of 13 on-chain, sentiment, and market indicators, it produces a 0-100

Market Heat Score

and actionable buy/sell recommendations.

Use Cases

Use this skill when users ask the following types of questions:

Has Bitcoin bottomed out / Can I buy the dip

Is Bitcoin overheated / Should I take profits

Where is BTC in the current cycle

Do on-chain data support building or reducing a position

What are long-term holders doing / Are ETFs buying or selling

Is leverage too high / Is the market too greedy

Scoring System Overview

The model uses a

weighted composite score from 0 to 100

:

0 = Extreme Fear

(historically the best buying opportunities)

100 = Extreme Greed

(historically the best selling opportunities)

Indicators are split into two groups:

Group

Weight

Purpose

Indicators

Daily Pulse

32 / 100

Fast-moving sentiment & flow signals

4 indicators

Weekly Structure

68 / 100

Slow-moving on-chain & cycle signals

9 indicators

The heavier weighting on weekly/structural indicators reflects their superior track record in identifying cycle extremes.

Daily Pulse Indicators (32 points total)

For each indicator, use web_search to find the latest data, then score according to the normalization rules below. Each indicator's raw value is normalized to a 0-100 sub-score, then multiplied by its weight to get its contribution to the total.

D1: Bitcoin ETF Daily Net Flow (Weight: 12 points)

What it is

The net amount of money flowing into or out of spot Bitcoin ETFs (like BlackRock's IBIT, Fidelity's FBTC) each day. Large inflows = institutional buying pressure; large outflows = institutional selling pressure. This became one of the most important demand indicators after spot BTC ETFs launched in January 2024.

Search keywords

:

Bitcoin ETF daily net flow

or

BTC spot ETF inflow outflow today

Scoring

:

Net outflow ≥ $500M → Sub-score 0 (Extreme fear / institutional panic selling)

Net flow ~$0 → Sub-score 50 (Neutral)

Net inflow ≥ $1B → Sub-score 100 (Extreme greed / FOMO buying)

Linear interpolation between these anchors

Interpretation

Sustained large ETF inflows often indicate late-stage institutional FOMO near tops. Conversely, persistent outflows or the absence of inflows during price drops can signal capitulation bottoms.

D2: Funding Rate (Weight: 8 points)

What it is

In perpetual futures markets, the funding rate is a periodic payment between long and short traders. Positive = longs pay shorts (bullish bias), negative = shorts pay longs (bearish bias). It directly reflects leverage sentiment in the derivatives market.

Search keywords

:

Bitcoin funding rate

or

BTC perpetual funding rate

Scoring

:

Funding rate ≤ -0.05% → Sub-score 0 (Extreme bearishness in derivatives)

Funding rate ~0.01% → Sub-score 50 (Neutral)

Funding rate ≥ 0.10% → Sub-score 100 (Extreme bullish leverage)

Linear interpolation between these anchors

Interpretation

Persistently high funding rates (>0.05%) mean longs are paying a premium to maintain positions — a crowded trade vulnerable to liquidation cascades. Deeply negative funding rates indicate short dominance, often seen near bottoms.

D3: Fear & Greed Index (Weight: 7 points)

What it is

A composite sentiment index (0-100) aggregating market volatility, volume, social media sentiment, surveys, Bitcoin dominance, and Google Trends. Published daily by Alternative.me. 0 = Extreme Fear, 100 = Extreme Greed.

Search keywords

:

crypto fear and greed index

or

Bitcoin fear greed index today

Scoring

Direct passthrough (the index itself is already on a 0-100 scale matching our framework).

Interpretation

When fear is extreme (<15), the crowd is capitulating — historically the best buying windows. When greed is extreme (>80), euphoria dominates — historically precedes significant corrections.

D4: Long/Short Ratio (Weight: 5 points)

What it is

The ratio of long to short positions on major exchanges (Binance, OKX, etc.). A ratio of 1.0 = equal longs and shorts. Above 1.0 = more longs. This shows real-time positioning of active traders.

Search keywords

:

Bitcoin long short ratio

or

BTC long short ratio Binance

Scoring

:

Ratio ≤ 0.8 → Sub-score 0 (Heavy short positioning)

Ratio ~1.0 → Sub-score 40 (Slight long bias is normal)

Ratio ~1.5 → Sub-score 70 (Crowded long)

Ratio ≥ 2.0 → Sub-score 100 (Extreme long crowding)

Interpretation

Extremely high long/short ratios indicate one-sided positioning vulnerable to a squeeze. Very low ratios (shorts dominating) can signal a potential short squeeze and reversal upward.

Weekly Structure Indicators (68 points total)

These on-chain and macro-cycle indicators move slowly and are more reliable for identifying major cycle tops and bottoms. Use web_search to find the latest data.

W1: LTH-MVRV — Long-Term Holder Market Value to Realized Value (Weight: 12 points)

What it is

MVRV calculated specifically for Long-Term Holders (coins held >155 days). It compares the current market value of LTH coins to their realized value (cost basis). When LTH-MVRV is low, even diamond hands are underwater — a powerful bottom signal. When very high, LTH are sitting on massive unrealized gains and likely to distribute.

Search keywords

:

Bitcoin LTH MVRV ratio

or

BTC long term holder MVRV glassnode

Scoring

:

LTH-MVRV ≤ 0.5 → Sub-score 0 (LTH deeply underwater, extreme bottom)

LTH-MVRV ~1.0 → Sub-score 20 (LTH at breakeven)

LTH-MVRV ≥ 3.5 → Sub-score 100 (LTH in massive profit, distribution likely)

Linear interpolation between anchors

Interpretation

This is one of the highest-weight indicators because LTH behavior has historically been the most reliable cycle marker. LTH-MVRV < 1.0 has only occurred at major cycle bottoms.

W2: NUPL — Net Unrealized Profit/Loss (Weight: 11 points)

What it is

Measures the overall unrealized profit or loss of all Bitcoin holders as a percentage. NUPL = (Market Cap - Realized Cap) / Market Cap. Negative = the network as a whole is at a loss. Above 0.75 = euphoria.

Search keywords

:

Bitcoin NUPL

or

BTC net unrealized profit loss

Scoring

:

NUPL ≤ -0.20 → Sub-score 0 (Capitulation — network-wide losses)

NUPL ~0.25 → Sub-score 50 (Neutral — moderate unrealized profit)

NUPL ≥ 0.75 → Sub-score 100 (Euphoria — massive unrealized gains, likely top)

Linear interpolation between anchors

Historical phases

NUPL < 0 = "Capitulation" (buy zone), 0-0.25 = "Hope/Fear", 0.25-0.50 = "Optimism", 0.50-0.75 = "Belief/Greed", > 0.75 = "Euphoria" (sell zone).

W3: LTH-SOPR — Long-Term Holder Spent Output Profit Ratio (Weight: 9 points)

What it is

When long-term holders move/sell their coins, LTH-SOPR measures whether they're selling at a profit (>1.0) or a loss (<1.0). It's calculated as the value at spending time ÷ value at creation time for outputs held >155 days.

Search keywords

:

Bitcoin LTH SOPR

or

BTC long term holder SOPR

Scoring

:

LTH-SOPR ≤ 0.5 → Sub-score 0 (LTH selling at massive losses — capitulation)

LTH-SOPR ~1.0 → Sub-score 25 (LTH selling at breakeven)

LTH-SOPR ≥ 5.0 → Sub-score 100 (LTH realizing 5x+ profits — distribution)

Interpretation

LTH selling at a loss is extremely rare and signals deep cycle bottoms. LTH selling at large multiples of profit indicates mature bull market distribution.

W4: STH-SOPR — Short-Term Holder Spent Output Profit Ratio (Weight: 8 points)

What it is

Same concept as LTH-SOPR but for Short-Term Holders (coins held <155 days). STH-SOPR < 1.0 means recent buyers are selling at a loss (panic), while > 1.0 means they're selling at a profit.

Search keywords

:

Bitcoin STH SOPR

or

BTC short term holder SOPR

Scoring

:

STH-SOPR ≤ 0.95 → Sub-score 0 (STH in significant loss — capitulation)

STH-SOPR ~1.00 → Sub-score 50 (Breakeven — key psychological level)

STH-SOPR ≥ 1.05 → Sub-score 100 (STH in profit — euphoric selling)

Interpretation

STH-SOPR persistently below 1.0 indicates recent buyers are underwater and panic selling — a bear market / bottom signal. STH-SOPR consistently above 1.0 means easy profits, attracting more speculation.

W5: LTH Supply Percentage (Weight: 7 points)

What it is

The percentage of total Bitcoin supply held by Long-Term Holders (>155 days). When LTH supply rises, coins are moving from weak hands (traders) to strong hands (holders) — accumulation. When it falls, LTH are distributing to new speculators.

Search keywords

:

Bitcoin long term holder supply percentage

or

BTC LTH supply ratio glassnode

Scoring

(INVERTED — higher LTH supply % = more accumulation = lower heat):

LTH Supply ≥ 75% → Sub-score 0 (Maximum accumulation — bottom zone)

LTH Supply ~65% → Sub-score 50 (Neutral)

LTH Supply ≤ 55% → Sub-score 100 (Maximum distribution — top zone)

Interpretation

This indicator is inverted because high LTH supply means coins are locked up by patient holders (bullish for future price, bearish for current sentiment). LTH supply peaks near cycle bottoms and troughs near cycle tops.

W6: 365-Day Moving Average Ratio (Weight: 6 points)

What it is

Current BTC price ÷ 365-day (1-year) moving average. When the ratio is below 1.0, price is below its annual average — a bear market signal and potential accumulation zone. When well above 1.0, price has significantly outrun its average — potentially overheated.

Search keywords

:

Bitcoin 365 day moving average

or

BTC price vs 1 year MA

Scoring

:

Ratio ≤ 0.5 → Sub-score 0 (Price 50%+ below annual MA — deep bear)

Ratio ~1.0 → Sub-score 33 (At the annual MA — neutral to slightly cool)

Ratio ≥ 2.0 → Sub-score 100 (Price 2x above annual MA — overheated)

W7: 200-Week Moving Average Multiplier (Weight: 6 points)

What it is

Current BTC price ÷ 200-week moving average. The 200WMA has historically acted as the "ultimate floor" in Bitcoin cycles. Price touching or going below the 200WMA has marked every major cycle bottom. Ratios of 3.5x+ have marked cycle tops.

Search keywords

:

Bitcoin 200 week moving average multiplier

or

BTC 200 WMA ratio

Scoring

:

Multiplier ≤ 0.5 → Sub-score 0 (Below 200WMA — generational buying opportunity)

Multiplier ~1.0 → Sub-score 17 (At 200WMA — strong support zone)

Multiplier ≥ 3.5 → Sub-score 100 (3.5x above 200WMA — cycle top zone)

Interpretation

Bitcoin has never closed a weekly candle below its 200WMA for an extended period. When the multiplier approaches 1.0 or drops below it, this is a historically rare and powerful buy signal.

W8: Weekly RSI (Weight: 5 points)

What it is

The Relative Strength Index on the weekly timeframe (14-period), measuring the speed and magnitude of price changes. Values range 0-100. The weekly timeframe filters out daily noise and reflects medium- to long-term momentum.

Search keywords

:

Bitcoin weekly RSI

or

BTC RSI weekly chart

Scoring

:

Weekly RSI ≤ 20 → Sub-score 0 (Extreme oversold)

Weekly RSI ~50 → Sub-score 50 (Neutral momentum)

Weekly RSI ≥ 80 → Sub-score 100 (Extreme overbought)

Linear interpolation

Historical reference

Bitcoin weekly RSI below 30 has occurred only at major cycle bottoms (2015, late 2018, March 2020, late 2022). Weekly RSI above 80 typically marks late-stage bull market tops.

W9: Volume Change Percentage (Weight: 4 points)

What it is

Current trading volume compared to the 30-day average volume, expressed as a percentage change. After a prolonged decline, volume dry-up (significantly below average) signals selling exhaustion. During rallies, extreme volume spikes can indicate blow-off tops.

Search keywords

:

Bitcoin trading volume trend

or

BTC volume vs 30 day average

Scoring

:

Volume 50%+ below 30-day avg → Sub-score 20 (Selling exhaustion — constructive for bottoms)

Volume near 30-day avg → Sub-score 45 (Normal)

Volume 200%+ above 30-day avg → Sub-score 100 (Blow-off volume — potential climax top)

Interpretation

Low volume after a crash = sellers exhausted (bullish for bottom formation). Extremely high volume after a rally = potential climax / blow-off top.

Market Heat Score — Comprehensive Rating

After scoring all 13 indicators, calculate the weighted composite:

Total Score = Σ (Indicator Sub-score × Weight / 100)

The maximum is 100. Interpret the composite score as follows:

Score Range

Rating

Market Phase

Action

0-15

🔵

Extreme Fear

Historic bottom opportunity

Aggressive accumulation (60-80% of planned BTC allocation)

16-30

🟢

Fear

Undervalued, accumulation window

Batch accumulation (40-60% of allocation)

31-45

🟢

Moderate Fear

Cool market, opportunity emerging

Begin building position (20-40% of allocation)

46-55

⚪

Neutral

Balanced sentiment

Hold current position, monitor for directional shift

56-70

🟡

Moderate Greed

Hot market, rising risk

Tighten stops, consider trimming 10-20%

71-85

🟠

Greed

Overheated, distribution phase

Gradually take profits, reduce to 40-60% of peak position

86-100

🔴

Extreme Greed

Historic top signal

Aggressive profit-taking, reduce to 20% or less

Critical note

Position percentages refer to your planned crypto allocation, not total net worth. Never allocate more to crypto than you can afford to lose entirely. Output Format Use the following structured template for analysis output:

🌡️ Bitcoin Market Heat Report

Date: [current date] BTC Current Price: $[price] Market Heat Score: [X] / 100

📊 Daily Pulse Indicators (Score: [X] / 32)