Indicator Overview

The BTC vs. S&P 500 Relative Strength indicator is a high-fidelity momentum metric designed to measure Bitcoin's performance parity against the world’s leading US index. By calculating the ratio between Bitcoin and the SPY (S&P 500 Proxy), this indicator filters out general market noise to reveal whether Bitcoin is genuinely outperforming the US stock market or simply rising with the tide of global liquidity.

The metric applies adapted RSI to the BTC/SPY ratio and subsequently smoothed to create a refined strength index. This process isolates periods of structural alpha, where Bitcoin’s growth velocity exceeds that of US equities. The colour-mapped gradient visualises these regimes of relative strength, helping investors identify when Bitcoin is the "lead horse" in a risk-on environment and when it is lagging behind traditional equities.

How To Use

Traders and macro analysts can use this indicator to determine the internal strength of the crypto market relative to traditional high-beta assets.

• Momentum Gradient: The indicator transitions through a deep-to-vibrant green palette. Dark Green segments represent periods where Bitcoin is neutral or underperforming the S&P on a relative basis. Bright Lime Green segments signal aggressive outperformance, typical of the vertical phases of a Bitcoin bull market.

• The 50-Line Equilibrium: The dashed white centerline represents the 50-level pivot. When the Strength Index holds consistently above 50, Bitcoin is in a regime of superior risk-adjusted momentum compared to the S&P. A breakdown below 50 often precedes a period of crypto winter or consolidation, even if the S&P 500 remains stable.

• Visual Divergence: By plotting the S&P 500 price (dashed white line) against Bitcoin (solid white line), users can spot Relative Strength Divergences. If the S&P is making new highs while the Strength Index is falling, it suggests that Bitcoin is losing its leadership status and may be due for a corrective phase.