Global Liquidity Score

Global Liquidity Score – Simple Risk-On / Risk-Off Gauge

This indicator measures overall market liquidity conditions using a single, normalized score.
It takes several macro and crypto variables, standardizes each one (z-score), and combines them into one clear Liquidity Score Line.

You only follow one line (your pink/white line).
The background color shows the current liquidity regime.

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What the indicator measures

The algorithm looks at four major liquidity sources:

1. USD Liquidity (tightening or easing)
• DXY (strong dollar = tighter global liquidity)
• US10Y yield (higher yields = liquidity drain)

2. Risk Sentiment (risk-on vs risk-off)
• VIX index (volatility)
• S&P 500 index (SPX)

3. Credit Market Strength
• High-yield ETFs: HYG, JNK
• Investment-grade corporate credit: LQD
Stronger credit = easier liquidity.
Weaker credit = tightening risk.

4. Internal Crypto Liquidity
• USDT dominance (higher = risk-off in crypto)
• Bitcoin price
• TOTAL2 (crypto market cap excluding BTC)

These are all converted into z-scores and combined into one metric:

Total Liquidity Score =
USD Block + Risk Block − Credit Block − 0.5 × Crypto Block

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How to read the colors

The indicator uses background colors to show the liquidity regime:

Color Meaning
Dark Red Severe liquidity tightening / strong risk-off
Red Mild-to-moderate tightening
Green Liquidity easing / soft risk-on
Dark Green Strong easing, high liquidity / risk-on

Your pink/white line = the final liquidity score.
You only need to follow that single line.

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How to interpret the score

📉 Positive score → Liquidity Tightening (Risk-Off)
• USD stronger
• Yields rising
• Volatility rising
• Credit markets weakening
• Crypto rotating to stablecoins

📈 Negative score → Liquidity Easing (Risk-On)
• USD weakening
• Yields falling
• Stocks rising
• Volatility low
• Credit markets strong
• Crypto beta assets outperform

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What this indicator is NOT

This is not a price predictor.
It does not follow BTC directly.
It tells you liquidity conditions, not immediate price direction.

It answers the macro question:

“Is liquidity flowing INTO the market or OUT of the market?”

If liquidity is tightening (red), crypto rallies are harder to sustain.
If liquidity is easing (green), crypto rallies have more fuel.