BitcoinShort
Buy the Dip? Sell the Rip? BTC Linear Regression Indicator
Updated
Built this indicator using a 377-period daily linear regression on the BTC Chart. Then, I measured the % difference between the price of BTC and the value of the linear regression.
In theory: you should buy the dip and sell the rip.
But how to know when?
I think that whenever BTC trades at a ~34% premium to its 377-day linear regression, then it may be due for a retracement. Whenever BTC trades at a ~30% discount to its 377-day linear regression, then it may be due for a dead-cat bounce.
BTC currently trades for a ~40% premium to the previously mentioned linear regression . . . i think we are due for a pullback.
It has traded as high as a 53% premium in 2021 so maybe the top isn't in. However, is an extra 13% gain worth a 20% drawdown?
NFA: I'm just short it and close my eyes.
Appreciate any questions/comments.
In theory: you should buy the dip and sell the rip.
But how to know when?
I think that whenever BTC trades at a ~34% premium to its 377-day linear regression, then it may be due for a retracement. Whenever BTC trades at a ~30% discount to its 377-day linear regression, then it may be due for a dead-cat bounce.
BTC currently trades for a ~40% premium to the previously mentioned linear regression . . . i think we are due for a pullback.
It has traded as high as a 53% premium in 2021 so maybe the top isn't in. However, is an extra 13% gain worth a 20% drawdown?
NFA: I'm just short it and close my eyes.
Appreciate any questions/comments.
Note
// This source code is subject to the terms of the Mozilla Public License 2.0 at mozilla.org/MPL/2.0/// © samfanderson1597
//version=5
indicator(title="Linear Regression Curve BTC Delta %", shorttitle="LRC Delta %", overlay=false,timeframe = "", precision = 5)
// resIn = input("D", "Resolution")
resIn_0 = input.timeframe(title='Resolution for Funding Interval', defval='')
res = resIn_0 == '0' ? timeframe.period : resIn_0
resIn_1 = input.timeframe(title='Resolution for TWAP Interval', defval='')
res_1 = resIn_1 == '0' ? timeframe.period : resIn_1
ticker1fut = input.symbol("INDEX:BTCUSD", "Symbol 1 Fut", tooltip="Select the futures pair for one you want to see funding rate")
typicalPrice_fut_1 = (request.security(ticker1fut, res, open) + request.security(ticker1fut, res, high) + request.security(ticker1fut, res, low) + request.security(ticker1fut, res, close)) / 4
src3 = typicalPrice_fut_1
len3 = input(defval=34)
offset3 = 0
out3 = ta.linreg(src3, len3, offset3)
diff1 = ((src3[0] - out3[0])/src3[0])
src5 = typicalPrice_fut_1
len5 = input(defval=89)
offset5 = 0
out5 = ta.linreg(src5, len5, offset5)
diff2 = ((src5[0] - out5[0])/src5[0])
src6 = typicalPrice_fut_1
len6 = input(defval=144)
offset6 = 0
out6 = ta.linreg(src6, len6, offset6)
diff3 = ((src3[0] - out6[0])/src3[0])
src7 = typicalPrice_fut_1
len7 = input(defval=233)
out7 = ta.linreg(src6, len7, offset6)
diff4 = ((src3[0] - out7[0])/src3[0])
src8 = typicalPrice_fut_1
len8 = input(defval=377)
out8 = ta.linreg(src8, len8, offset6)
diff5 = ((src3[0] - out8[0])/src3[0])
plot(diff1, title = "Diff 1",color = diff1 >= 0 ? color.rgb(54, 244, 101) : color.rgb(150, 50, 0))
plot(diff2, title = "Diff 2",color = diff2 >= 0 ? color.rgb(54, 244, 101) : color.rgb(150, 50, 0))
plot(diff3, title = "Diff 3",color = diff3 >= 0 ? color.rgb(54, 244, 101) : color.rgb(150, 50, 0))
plot(diff4, title = "Diff 4",color = diff4 >= 0 ? color.rgb(54, 244, 101) : color.rgb(150, 50, 0))
plot(diff5, title = "Diff 5",color = diff5 >= 0 ? color.rgb(54, 244, 101) : color.rgb(150, 50, 0))
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