BTC On-Chain Composite Index (OCI)

BTC On-Chain Composite Index (OCI)

The BTC On-Chain Composite Index (OCI) combines three crucial on-chain metrics—MVRV (Market Value to Realized Value), SOPR (Spent Output Profit Ratio), and Active 1Y (1-Year Active Addresses)—into a single composite indicator. This index provides a comprehensive view of Bitcoin’s on-chain health, reflecting market sentiment, profitability, and long-term holder behavior.

The OCI calculates a Z-score over a customizable period (default: 330), allowing users to identify overbought and oversold conditions with precision. The Z-score highlights deviations from the mean, where customizable thresholds for oversold (-1.5) and overbought (2.5) levels help pinpoint extreme market conditions.

Additionally, the OCI provides Top/Bottom thresholds (default: 0.6 for bottom, 1.8 for top), visually marking zones where Bitcoin may be fundamentally over- or under-valued. Users can switch between three display modes:

• OCI Top/Bottom: Colors bars based on whether the OCI crosses critical levels.
  
• Gradient: Applies a color gradient based on the Z-score.
  
• Z Score OB/OS: Focuses on highlighting extreme Z-score levels with color-coded bars.
  

This indicator supports bar coloring to visually indicate momentum changes, with green indicating oversold levels, red showing overbought, and teal marking neutral conditions. It is designed for traders and investors looking to make data-driven decisions by interpreting Bitcoin’s underlying market dynamics through key on-chain metrics.