Bitcoin Crosby Ratio

Bitcoin Crosby Ratio

The Crosby Ratio is a price action based Market Cycle chart that can be used to examine both longer and lower timeframes to outline areas of overly bullish/bearish sentiment.

It calculates the arc tangent, or the angular change of a 30 period moving average of price action before standardising the data for the average true range, or volatility, of $BTC.

This formula provides a view into areas of exponential upside or downside for Bitcoin, which has historically coincided with peaks and bottoming periods of price on mid-timeframes within cycles.

When the circle Crosby Ratio reaches the circle red upper boundary:

• sentiment is likely overly bullish/greedy due to the large divergence between current price and its recent average.
• this area has been calculated to contain approximately 5% of Bitcoin's price action.
• historically provided clear areas in which profit taking could be considered for lower time frame traders.

When the ratio reaches the circle green lower boundary:

• sentiment is likely overly bearish/fearful.
• Bitcoin is potentially undervalued relative to its recent price action.
this region has been calculated to align with approximately 5% of Bitcoin's price action.
• historically accumulating during these periods has provided outsized returns with a favourable risk to reward.

This ratio provides a unique insight into both the longer term and short term cyclical movements of BTC by highlighting these extreme conditions to predict upcoming directional moves on a more frequent basis than other traditional market cycle charts.

Implemented alongside other metrics for confluence, this tool can be useful for intra-cycle swings to form an effective trading strategy; as well as for investors identifying the most opportune moments of accumulation and distribution.

Created By:

@ParabolicBing