custom-indicators

Files (5)

• SKILL.md
• indicator_formulas.md · references/
• signal_interpretation.md · references/
• compute_crypto_indicators.py · scripts/
• holder_momentum.py · scripts/

SKILL.md (first lines)

# Custom Crypto Indicators

## Why Standard TA Falls Short for Crypto

Traditional technical analysis was built for equities and forex — markets with
fixed supply, regulated exchanges, and institutional-dominated order flow.
Crypto markets have unique properties that demand purpose-built indicators:

- **On-chain transparency**: Every transaction is public. We can measure real
  economic activity, not just price and volume on a single exchange.
- **Supply mechanics**: Fixed or programmatic supply schedules make
  supply-side analysis (velocity, holder distribution) meaningful.
- **Derivatives dominance**: Perpetual futures funding rates and open interest
  often drive spot price, not the other way around.
- **Whale concentration**: A small number of wallets hold outsized supply.
  Tracking their behavior provides alpha that equity-market TA cannot.
- **Exchange flows**: On-chain deposit/withdrawal to centralized exchanges
  signals intent to sell or accumulate.

This skill covers nine crypto-native indicators. Each section includes the
formula, interpretation guide, data sources, and a working code snippet.

## Files

| File | Description |
|------|-------------|
| `references/indicator_formulas.md` | Full formulas, parameter tables, signal ranges for all 9 indicators |
| `references/signal_interpretation.md` | Composite scoring, divergence detection, false signal filtering |
| `scripts/compute_crypto_indicators.py` | Computes all 9 indicators from free APIs or demo data |
| `scripts/holder_momentum.py` | Holder count tracking with momentum signals |

---

## Indicator 1: NVT Ratio

**Network Value to Transactions** — the crypto equivalent of a P/E ratio.

```
NVT = Market Cap / Daily On-Chain Transaction Volume (USD)
```

- **High NVT (> 65)**: Network is overvalued relative to its economic
  throughput. Bearish signal.
- **Low NVT (< 25)**: Network is undervalued or seeing heavy real usage.
  Bullish signal.
- **Data sources**: CoinGecko (market cap), blockchain explorers or
  DeFiLlama (transaction volume).

```python
def nvt_ratio(market_cap: float, daily_tx_volume_usd: float) -> float:
    """Compute NVT ratio.

    Args:
        market_cap: Current market capitalization in USD.
        daily_tx_volume_usd: 24h on-chain transaction volume in USD.

    Returns:
        NVT ratio value.
    """
    if daily_tx_volume_usd <= 0:
        return float("inf")
    return market_cap / daily_tx_volume_usd
```

**Smoothing**: Apply a 14-day or 28-day moving average to NVT (called
NVT Signal) to reduce noise from daily volume spikes.

---

## Indicator 2: MVRV Ratio

**Market Value to Realized Value** — compares the current market cap to the
aggregate cost basis of all holders.

```
MVRV = Market Cap / Realized Cap
Realized Cap = Sum of (each UTXO * price when it last moved)
```

- **MVRV > 3.5**: Most holders are in deep profit. Distribution likely.
- **MVRV < 1.0**: Most holders are underwater. Historically marks bottoms.
- **Data sources**: Glassnode, CryptoQuant (Bitcoin/Ethereum). For Solana
  tokens, approximate via average entry price of top holders.

```python
def mvrv_ratio(market_cap: float, realized_cap: float) -> float:
    """Compute MVRV ratio.

    Args:
        market_cap: Current market capitalization in USD.
        realized_cap: Realized capitalization (aggregate cost basis).

    Returns:
        MVRV ratio value.
    """
    if realized_cap <= 0:
        return float("inf")
    return market_cap / realized_cap
```

For tokens without UTXO-based realized cap, estimate using average purchase
price from DEX trade history multiplied by circulating supply.

---

## Indicator 3: Exchange Flow

**Net exchange deposits minus withdrawals** — signals selling or accumulation
intent.

```
Exchange Netflow = Deposits to Exchanges - Withdrawals from Exchanges
```

- **Positive netflow (large deposits)**: Holders moving tokens to exchanges,
  likely to sell. Bearish.
- **Negative netflow (withdrawals)**: Tokens leaving exchanges to cold
  storage. Bullish accumulation signal.
- **Data sources**: CryptoQuant, Glassnode. For Solana SPL tokens, track

From Serennity007/awesome-stock-quant-skills, MIT.

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