Indicator Overview

The Z-Score Probability Waves indicator presents a statistically grounded framework for understanding price deviation extremes relative to a smoothed mean. By using Z-Score normalisation over a configurable lookback period, it quantifies how far price has moved from its expected average in standard deviation units, which is an approach widely used in quantitative analysis to identify overbought and oversold zones with mathematical rigour.

How To Use

The Z-score columns turn green above zero, signaling bullish momentum, and red below, indicating bearish pressure. Values exceeding ±2 (yellow zone) suggest overbought or oversold conditions, while ±3 (orange) or ±4 (red) mark extreme reversals, historically preceding corrections or rallies. Labeled price levels for each zone guide entry or exit points. Traders can buy near -2 or lower (oversold) and sell near +2 or higher (overbought). Investors may accumulate during negative Z-score dips and reduce exposure at positive peaks, aligning with Bitcoin’s cyclical statistical patterns for precise market timing.