Spread Analysis (COIN/BTC)

3일 전

The Spread Analysis (COIN/BTC) indicator calculates the Z-score of the price ratio between Coinbase stock (COIN) and Bitcoin (BTC). It helps identify overbought or oversold conditions based on deviations from the historical mean of their price relationship.

Key Features:

Z-Score Calculation:
• Tracks the relative price ratio of COIN to BTC.
• Compares the current ratio to its historical average, highlighting extreme overvaluation or undervaluation.
• Buy and Sell Signals:
• Buy Signal: Triggered when the Z-score is less than -2, indicating COIN may be undervalued relative to BTC.
• Sell Signal: Triggered when the Z-score exceeds 2, suggesting COIN may be overvalued relative to BTC.
• Dynamic Z-Score Visualization:
• Blue line plots the Z-score over time.
• Dashed lines at +2 and -2 mark overbought and oversold thresholds.
• Green and red triangles highlight actionable buy and sell signals.

Use Case:

This indicator is ideal for identifying relative valuation opportunities between COIN and BTC. Use it to exploit divergences in their historical relationship and anticipate potential reversions to the mean.

Limitations:

• Best suited for range-bound markets; may produce false signals in strongly trending conditions.
• Assumes a consistent correlation between COIN and BTC, which may break during independent price drivers like news or earnings.