Indicator Overview

The STH Profitability Distribution Model is a high-fidelity price-action tool designed to visualise Bitcoin’s market cycles through the lens of Short-Term Holder (STH) profit psychology. By converting the STH MVRV oscillator into a price-band distribution, the indicator identifies precisely where the market is trading relative to its historical profitability extremes.

This model serves as a fair value and exhaustion tracker: it defines the neutral break-even price (Realised Price) and projects volatility bands based on the 95th and 5th percentiles of historical STH profitability. The colour-coded bento-header and glow-mapped ribbons signal when the market has pushed beyond sustainable profit levels (Overheated) or has reached a state of deep seller exhaustion (Undervalued).

How To Use

Traders can utilise the distribution bands to differentiate between healthy trend pullbacks and terminal cycle peaks.

• The Profitability Ribbon: The area between the Neutral line and the 5% Extremes is filled with a semi-transparent gradient. A price trading within the Red Ribbon (Neutral to Top 5%) indicates a high-momentum greed zone, while the Green Ribbon (Neutral to Bottom 5%) marks a value zone.

• The 95th Percentile (Overheated): When the white price line touches or exceeds the Red Glow Band, the market is at its point of maximum short-term financial overheating. Historically, this corresponds with local or macro cycle tops as STHs realise outsized profits.

• The 5th Percentile (Undervalued): When the price hits the Green Glow Band, it indicates that STH profitability is in the bottom 5% of all historical readings. This represents extreme financial distress for new entrants and has historically marked generational buying opportunities.

• MVRV Percentile Rank: The dynamic percentile box provides a live "Probability Score". A reading above 90% suggests the trend is nearing terminal exhaustion, while a reading below 10% suggests a high-probability bottom is forming.