Scoring Formulas

Exact thresholds and weights from the production calculator (regime_calculator_v3.ts)

Overview

The system uses four pillars, each scoring from −10 (extremely bearish) to +10 (extremely bullish). Each pillar is computed from weighted sub-components and normalized to the −10/+10 range. The final regime score is a weighted average of the four pillar scores.

Final score formula

final_score = (price × 0.30) + (liquidity × 0.30) + (derivatives × 0.25) + (volatility × 0.15)

30%Price & Structure

30%Liquidity

25%Derivatives

15%Volatility

Pillar 1

Price & Structure

weight: 30%

Market sentiment is measured via the Fear & Greed Index (0–100). Moderate greed is bullish; extreme greed triggers a contrarian penalty, and extreme fear is treated as risk-off.

Component: Fear & Greed Index: 100% weight within pillar

Index Value	Raw Score	Interpretation
0 – 10	-6	Extreme Fear: risk-off conditions
11 – 25	-3	Fear: bearish conditions
26 – 40	0	Mild Fear: neutral
41 – 60	++3	Neutral to Mild Greed: healthy conditions
61 – 75	++5	Greed: bullish, peak signal
76 – 90	++2	High Greed: caution, momentum may fade
91 – 100	-2	Extreme Greed: contrarian bearish

Normalization: Raw score (max absolute value: 6) is divided by 6 and multiplied by 10 to produce a pillar score in the −10 to +10 range. A raw score of +5 yields a pillar score of +8.33.

Pillar 2

Liquidity

weight: 30%

Three signals measure capital flows into and out of Bitcoin: stablecoin supply growth, spot ETF net flows, and BTC exchange netflows. The 7D and 30D regimes use different rolling window sizes for these inputs: the scoring thresholds are identical.

Component A: Stablecoin Market Cap 7-day Change 25% weight within pillar

Rising stablecoin supply signals new capital entering the crypto ecosystem (bullish).

7-day Supply Change	Raw Score	Signal
> +2%	++5	Strong inflow
> +0.5%	++3	Moderate inflow
> 0%	++1	Slight inflow
> −0.5%	−1	Slight contraction
> −2%	−3	Moderate contraction
≤ −2%	−5	Heavy outflow

Component B: Spot Bitcoin ETF Net Flows (3-day rolling sum) 55% weight within pillar

Absolute USD million thresholds. Dominant ETFs: IBIT, FBTC, GBTC, ARKB, BITB.

3-day Net Flow (USD M)	Raw Score	Signal
> $500M	++6	Exceptional institutional demand
> $200M	++4	Strong inflows
> $50M	++2	Moderate inflows
> −$50M	0	Neutral (flat flows)
> −$200M	−2	Moderate outflows
> −$500M	−4	Heavy outflows
≤ −$500M	−6	Exceptional outflows / distribution

Component C: Exchange Netflow 20% weight within pillar

Positive = BTC flowing onto exchanges (distribution, bearish). Negative = BTC leaving exchanges (accumulation, bullish).

Netflow (USD M)	Raw Score	Signal
> $100M	−5	Large inflow: heavy distribution (bearish)
$0 to $100M	−3	Moderate inflow: distribution (bearish)
~$0	0	Neutral: balanced flows
−$100M to $0	++3	Moderate outflow: accumulation (bullish)
< −$100M	++5	Large outflow: strong accumulation (bullish)

Pillar 3

Derivatives

weight: 25%

Three signals measure positioning health in perpetual futures markets. The funding rate is contrarian: overleveraged longs paying high premiums is a bearish warning, not confirmation.

Component A: Funding Rate (per 8h) 40% weight within pillar: CONTRARIAN

Raw rate in % per 8-hour settlement period (e.g., 0.010 = 0.010%). Normal BTC funding is around 0.010%. Rates above 0.030% indicate extreme long leverage.

Funding Rate (%/8h)	Raw Score	Market Condition
> 0.030%	−6	Extremely overleveraged longs: reversal risk high
> 0.015%	−3	Elevated long leverage
> 0.005%	−1	Mildly elevated: normal but slight caution
> −0.005%	++2	Neutral to slightly negative: healthy positioning
> −0.015%	++3	Negative funding: shorts paying, contrarian bullish
≤ −0.015%	++6	Extreme negative: squeeze setup, strongly bullish
= 0	0	No data

Component B: Open Interest 24h Change 30% weight within pillar

Rapid OI expansion signals unhealthy leverage building. Moderate stable OI is neutral to slightly positive.

OI 24h Change	Raw Score	Signal
> +10%	−4	Extreme leverage buildup: unstable
> +5%	−2	Heavy leverage building
> +2%	++1	Moderate increase: slightly healthy
> −2%	++2	Stable or slight decrease: healthy
> −5%	0	Moderate unwinding: neutral
≤ −5%	−3	Sharp deleveraging: possible panic
null	0	No data

Component C: Liquidation Cascade Ratio 30% weight within pillar

Ratio = 24h liquidations ÷ 7-day average daily liquidations. A ratio above 1.5 indicates an abnormal cascade event.

Spike Ratio (24h / 7d avg)	Raw Score	Signal
> 3.0×	−6	Extreme cascade: violent market dislocation
> 2.0×	−4	Large cascade: significant forced selling
> 1.5×	−2	Elevated: cascade event in progress
0.5 – 1.5×	0	Normal range: calm market
< 0.5×	++1	Very quiet: mildly positive
no data	0	Both 24h and 7d avg are zero

Pillar 4

Volatility

weight: 15%

Volatility is proxied using the magnitude of open interest changes and the liquidation spike ratio. Calm, stable markets score positively. High-volatility cascade events score negatively.

Component A: OI Change Magnitude |24h %| 60% weight within pillar

Absolute value of the 24h OI change. Large swings in either direction indicate elevated volatility. The 60/40 split applies when both components are present. If OI change data is unavailable, the pillar is computed from the Liquidation Vol component alone (weight normalizes to 100%).

\|OI Change\| 24h	Raw Score	Volatility Level
< 1%	++3	Very calm
< 3%	++2	Calm: normal activity
< 5%	0	Moderate: neutral
< 10%	−2	Elevated: increasing stress
≥ 10%	−4	Extreme volatility

Component B: Liquidation Volume Ratio 40% weight within pillar

Same ratio used in Derivatives Component C (24h liquidations ÷ 7d avg). Here it measures overall market stress, not directional risk.

Spike Ratio	Raw Score	Volatility Signal
< 1.2×	++2	Calm: very low liquidation activity
< 1.5×	0	Normal range
< 2.0×	−1	Elevated: stress building
≥ 2.0×	−3	High: liquidation-driven volatility

Final Score & Regime Classification

Weighted average

final_score = (price_score × 0.30)

+ (liquidity_score × 0.30)

+ (derivatives_score × 0.25)

+ (volatility_score × 0.15)

Each pillar score is in the −10 to +10 range. The final score is also −10 to +10.

Regime thresholds

Final Score	Regime	Description
≥ +5.0	RISK-ON	Strong bull conditions across all pillars
≥ +2.0	CAUTIOUS-BULL	Bullish but with some weakening signals
≥ −2.0	NEUTRAL	Mixed or indeterminate conditions
≥ −5.0	CAUTIOUS-BEAR	Bearish but not fully collapsed
< −5.0	RISK-OFF	Strong bear conditions: capital preservation mode

Hysteresis: Preventing Regime Whipsaw

A 0.5-point dead-band prevents rapid regime flipping at boundaries. The score must exceed a threshold by at least 0.5 points to trigger a regime change. For example, transitioning from NEUTRAL to CAUTIOUS-BULL requires a score of ≥ +2.5, not just ≥ +2.0, if the previous regime was NEUTRAL.

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