Indicator Overview

The Macro Asset Correlation Oscillator is a diagnostic tool designed to measure the statistical relationship between Bitcoin and major global financial benchmarks. By calculating a rolling 60-day Pearson Correlation of daily returns, this indicator reveals whether assets are moving in lockstep (positive correlation), moving in opposite directions (negative correlation), or acting independently (decoupling).

The oscillator is mapped to a range of +1.0 to -1.0. The visual interface uses a dual-color area fill: Green represents periods of positive correlation where assets trend together, and Red represents periods of negative correlation. This provides a high-fidelity look at Bitcoin’s evolving role as either a high-beta risk asset or a non-correlated "Digital Gold" hedge.

How To Use

Investors can use this oscillator to determine the current market regime and assess the diversification benefits of their portfolio at any given time.

• The Zero Line (Decoupling): When the oscillator sits at or near 0.0, it indicates that the two assets have no statistical relationship. This is the "Holy Grail" for diversification, as it means the price action of Asset 1 (e.g. Bitcoin) is being driven by unique internal factors rather than broad macro trends.

• Risk-On vs. Risk-Off:

  • High Positive Correlation (+0.5 to +1.0): Typically seen when Bitcoin correlates strongly with the Nasdaq 100 (QQQ) or S&P 500, signalling that it is being treated as a risk-on speculative asset.

  • High Negative Correlation (-0.5 to -1.0): Occurs when Bitcoin moves inversely to another asset. For example, a negative correlation with the S&P 500 during a market crash suggests Bitcoin is acting as a safe haven or flight-to-quality asset.

• The 60-Day Window: The choice of a 60-day rolling window provides a balance between responsiveness and significance. It is long enough to filter out daily flash volatility but short enough to capture seasonal shifts in monetary policy, inflation prints, and geopolitical events.