Methodology & Risk Factor Breakdown
A transparent, data-driven approach to Bitcoin risk assessment using five independent pillars.
What the G-Score is
The GhostGauge G-Score is a daily composite from 0–100 where higher = higher market risk (more crowding, leverage, froth). It's informational context—not advice. All inputs use UTC timestamps and finalized data.
How it's made (in one breath)
Each factor is normalized vs its own history, winsorized, mapped to 0–100, then combined by pillar weights. Two small adjustments can apply: Cycle (Power-Law) and Spike (Volatility). Price source for all price-based signals is the Coinbase daily close (UTC) for consistency.
The Five Pillars (SSOT)
Five Pillars of Risk
Our methodology evaluates Bitcoin risk across five independent pillars, each contributing to a composite G-Score.
- Liquidity/Flows — 30%: Stablecoins (18%), ETF Flows (7.7%), Net Liquidity (4.3%). Captures "is money coming in or out?" breadth and participation.
- Momentum/Valuation — 30%: Trend & Valuation (BMSB 60%, Mayer 30%, RSI 10%). Anchors where price sits vs regime and long-trend stretch.
- Term Structure/Leverage — 20%: Futures/derivatives term structure and leverage conditions; stress here often precedes spot.
- Macro Overlay — 10%: Macro context relevant to Bitcoin (e.g., liquidity proxies, rates) summarized into a single overlay.
- Social/Attention — 10%: A light measure of narrative intensity and attention—supporting signal, not the star.
Adjustments (small, additive)
- Cycle (Power-Law): Activates only when price deviates >30% from a long-term power-law trend; capped ±2.0 points.
- Spike (Volatility): Activates when the daily move > 2× recent (20-day EWMA) volatility; capped ±1.5 points.
Band Legend (how to read the number)
BTC G-Score Calculation
How It Works
Weighted Average
Each pillar contributes a weighted score to the final G-Score, with weights determined by historical performance and market relevance.
Score Interpretation
The G-Score provides a normalized risk assessment that accounts for multiple market factors simultaneously.
Risk Bands
Risk bands provide context for interpreting G-Scores and help categorize market conditions.
Key Risk Factors
The G-Score is calculated using eight carefully selected risk factors across five pillars. Each factor is weighted based on their historical correlation with Bitcoin's price movements and market cycles.
Factor Weight Distribution
Trend & Valuation
What we look at
- • Price vs 200-day SMA (Mayer Multiple)
- • Distance to Bull Market Support Band (20W SMA / 21W EMA)
- • Weekly momentum (RSI proxy)
Why it matters
Captures overextension versus long-term trend; extended runs above trend often cool. Most fundamental risk indicator providing cycle positioning.
How it affects risk
↑ stretch above trend ↑ risk; below trend ↓ risk
Update cadence & staleness
Daily; stale >48h
Primary sources
Coinbase daily close (UTC), Rolling SMAs/EMA
Caveats
Trend can stay elevated in strong markets.
Stablecoins
What we look at
- • 30-day change in total USDT/USDC (and 5 others)
- • Market-cap weighted supply growth
- • 365-day historical baseline percentile
Why it matters
Stablecoin supply precedes on-exchange buying capacity. Crypto-native liquidity indicator with enhanced 7-coin coverage.
How it affects risk
↑ supply growth ↓ risk; contractions ↑ risk
Update cadence & staleness
Daily; stale >48h
Primary sources
Coinbase daily close (UTC), Fear & Greed Index, Social sentiment analysis
Caveats
Exchange behavior and chain migrations can add noise.
Net Liquidity
What we look at
- • Fed balance sheet (WALCL)
- • Reverse Repo (RRPONTSYD)
- • Treasury General Account (WTREGEN) → net liquidity proxy
Why it matters
Liquidity conditions shape risk appetite; shrinking liquidity pressures risk assets. Fed balance sheet backdrop for market conditions.
How it affects risk
↓ net liquidity / negative Δ ↑ risk; ↑ liquidity ↓ risk
Update cadence & staleness
Weekly; stale >8 days
Primary sources
Caveats
Macro proxy; indirect for BTC.
ETF Flows
What we look at
- • US spot BTC ETF net creations/redemptions
- • 21-day business-day flow momentum
- • Weekend/holiday exclusion logic
Why it matters
Proxies institutional demand via regulated vehicles. Major institutional adoption indicator with business-day awareness.
How it affects risk
↑ sustained inflows ↓ risk; persistent outflows ↑ risk
Update cadence & staleness
Business days; stale >72h
Primary sources
Caveats
Holidays/reporting lags.
On-chain Activity
What we look at
- • Network congestion (transaction fees vs historical)
- • Transaction activity (normalized daily count)
- • Hash rate security bonus/penalty (±5 points)
Why it matters
Core Bitcoin network metrics. Network congestion and activity indicate usage pressure and potential stress.
How it affects risk
↑ congestion + activity ↑ risk; ↑ security ↓ risk
Update cadence & staleness
Daily; stale >24h
Primary sources
Caveats
Network upgrades and fee market changes can affect metrics.
Term Structure & Leverage
What we look at
- • Funding rate level across exchanges
- • Funding rate volatility (instability)
- • Term structure stress indicator
Why it matters
Derivatives market health and leverage cycles. Critical for understanding market stress and funding conditions.
How it affects risk
↑ funding + ↑ volatility + ↑ stress ↑ risk
Update cadence & staleness
6-hour; stale >12h
Caveats
Exchange-specific funding rate differences can vary.
Social Interest
What we look at
- • Bitcoin trending rank and social attention
- • 7-day vs 7-day price momentum
- • Search attention patterns
Why it matters
Sentiment indicator and attention proxy. Least predictive but useful for understanding market psychology.
How it affects risk
↑ search attention + ↑ momentum ↑ risk
Update cadence & staleness
6-hour; stale >12h
Primary sources
Coinbase daily close (UTC), Social sentiment analysis, Price momentum analysis
Caveats
Social sentiment can be manipulated and is least predictive.
Macro Overlay
What we look at
- • Dollar strength (DXY momentum)
- • Interest rate environment (2Y/10Y Treasury)
- • Risk appetite gauge (VIX level + momentum)
Why it matters
External macroeconomic factors. Dollar strength, rising rates, and market fear affect risk asset performance.
How it affects risk
↑ dollar strength + ↑ rates + ↑ fear ↑ risk
Update cadence & staleness
Daily; stale >48h
Primary sources
Caveats
Macro factors are indirect and can have delayed effects on BTC.
Data Quality & Reliability
Quality Controls
- • Schema tripwires for format changes
- • Z-score tripwires for outliers
- • Cache fallbacks for API failures
- • Retry logic with exponential backoff
Reliability Features
- • Multi-source fallback chains
- • Business-day aware calculations
- • Historical baseline comparisons
- • Real-time staleness detection
Factor Weights
Current Weights (v1.1)
Liquidity/Flows 30%, Momentum/Valuation 30%, Term Structure/Leverage 20%, Macro Overlay 10%, Social/Attention 10%. Weights are fixed; each factor is normalized vs its history.
Current Weights
Weight Adjustment
Weights are recalculated based on:
- Historical performance
- Market volatility
- Correlation analysis
- Regime changes
Data Sources & Methodology
Our methodology combines multiple data sources and analytical approaches to provide a comprehensive risk assessment.
Data Sources
- Coinbase daily close (UTC)
- Blockchain.info
- Federal Reserve Economic Data
- Alternative.me Fear & Greed Index
Update Frequency
- Real-time price data
- Daily on-chain metrics
- Weekly macro indicators
- Monthly regulatory updates
Model version: v1.1 — Pillars set to 30/30/20/10/10 (Oct 2025). Prior config (38/33/18/6/5) retired.