Overview
After computing the four pillar scores and combining them into a final score (−10 to +10), that score is classified into one of five regimes. Each regime has a defined score range and a distinct set of market characteristics.
The Five Regimes
RISK-ON
Score ≥ 70 (≥ +4.0)- · Strong market sentiment (Fear & Greed 61–90)
- · Significant ETF inflows and/or rising stablecoin supply
- · Healthy funding rates: not overleveraged
- · Low liquidation activity, calm derivatives markets
All four pillars scoring positively. Liquidity is flowing in, derivatives are not overextended, and sentiment is elevated.
January 2024 ETF launch period: all four pillars scored strongly positive. ETF inflows were at record levels, sentiment was elevated (not extreme), funding rates were healthy, and liquidation activity was low.
CAUTIOUS-BULL
Score 58 to 69 (+1.6 to +3.9)- · Bullish price sentiment but some divergences appearing
- · Liquidity flows positive but slowing or mixed
- · Funding rates elevated: longs accumulating leverage
- · Moderate liquidation spikes possible
Net bullish conditions, but at least one pillar showing stress or softening. Not all components are aligned.
March 2024 near $73k ATH: sentiment was extreme (91+), ETF flows were slowing, and funding rate was very elevated. Multiple pillars showed stress while price remained elevated.
NEUTRAL
Score 42 to 57 (−1.6 to +1.5)- · Mixed or indeterminate signals across pillars
- · ETF flows flat, stablecoin supply stable
- · Funding rates near zero: balanced positioning
- · No clear directional bias in derivatives
Pillars are split or all near zero. No sustained trend in either direction. The system sees insufficient signal to lean bullish or bearish.
Summer 2023: Pillars showed mixed readings for several months. ETF flows were flat (pre-launch), stablecoin supply was stable, and funding rates were near zero. No pillar showed a sustained directional signal.
CAUTIOUS-BEAR
Score 30 to 41 (−4.0 to −1.7)- · Bearish sentiment: Fear & Greed declining
- · ETF outflows or stablecoin contraction
- · Rising liquidation cascade ratios
- · Funding rates negative: shorts building
Net bearish conditions, with outflows and derivative stress visible. Not yet at extreme levels.
May 2022 LUNA collapse: liquidation cascade ratios spiked to extreme levels, sentiment dropped sharply into the Fear zone, and ETF proxy flows (pre-launch era: exchange flows) turned negative. Multiple pillars scored strongly negative.
RISK-OFF
Score < 30 (< −4.0)- · Extreme fear in sentiment index
- · Sustained heavy ETF outflows
- · Liquidation cascade ratios at extreme levels (>3×)
- · Large negative OI changes: capitulation deleveraging
All pillars signaling stress. Outflows dominant, derivatives showing capitulation, sentiment at extreme fear levels.
November 2022 FTX collapse: liquidation volume was at extreme multiples of the 7-day average, exchange inflows were very large (indicating distribution), and sentiment reached 5 (extreme fear). All pillars scored at or near their most negative values.
Key principles
- → Regime classification describes the current state of the market, not a prediction of what comes next.
- → The Macro Context layer provides an independent overlay showing how macro conditions align with or diverge from the BTC regime.
- → Regime changes lag market turns slightly by design. The hysteresis mechanism prioritizes stability over sensitivity.
This is data and information only. Not financial advice.