Indicator Overview

The Logarithmic Deviation Torch is a long-term valuation and risk-assessment tool that measures the equal-weighted Top 10 Altcoin Index’s historical over- and underextension relative to a long-term average. This index compiles the following top 10 utility-focused altcoins (as of December 2025):

1. Ethereum (ETH)

2. XRP (XRP)

3. BNB (BNB)

4. Solana (SOL)

5. Cardano (ADA)

6. Chainlink (LINK)

7. TRON (TRX)

8. Monero (XMR)

9. Avalanche (AVAX)

10. Litecoin (LTC)

The index price is calculated as the average of these 10 altcoins’ prices (equal weighting).

By combining logarithmic price deviation with a time-weighting factor, it creates a single metric that gives greater relevance to recent market cycles while preserving the full historical spectrum. The resulting values are normalized across all available data and displayed as colored dots above the price chart, using a 6-stage heat-map scale from peach (extreme underextension) to dark red (extreme overextension). Three key projected price levels — Max Risk, Median Risk, and Min Risk — are displayed in real time, showing the index price that would correspond to the most extreme historical deviations if they occurred today.

How To Use

Extreme dark red dots signal historically rare overextension and elevated crash risk in the altcoin sector, while peach/white dots indicate extreme underextension and historically strong accumulation zones. The Max Risk annotation (red) represents the index price level the basket would reach if current market structure replicated the most overextended regime in history, serving as a dynamic upper-boundary warning. Conversely, the Min Risk annotation (green) marks the level corresponding to the deepest historical undervaluation. Traders use crossings of the Median Risk line and clustering of dot colors to assess regime shifts, identify potential cycle tops and bottoms, and calibrate position sizing across these altcoins. The indicator is most effective on full logarithmic history views and serves as a strategic compass for cycle-aware investors in this utility-driven altcoin sector rather than a short-term timing tool.