Normalized Realized Oscillator

How to read the Normalized Realized Oscillator

The raw input is still the same:

Raw = ln(Price / Realized Price)

That raw log value tells you the exact valuation multiple versus Bitcoin's realized price. This indicator then starts on 2012-01-01, tracks the highest and lowest raw values seen so far, applies a small decay factor of 0.9999 each day, and rescales the current reading into a fixed range from -1 to +1.

Normalized = ((2 * (Raw - MinSeen)) / (MaxSeen - MinSeen)) - 1

The key distinction is what the number means. A raw log oscillator reading tells you the exact distance from realized price. A normalized reading tells you how historically extreme that distance is relative to previous cycles after the old extremes have slowly faded.

• Below -0.5 — Strong Buy — The raw log distance is near the lower edge of its adaptive historical range. This usually means the market is deeply washed out relative to prior cycle lows.
• -0.5 to 0 — DCA Zone — The oscillator is in the lower half of its adaptive range. Bitcoin is historically cheap relative to realized-price extremes, but not at a maximum washout.
• 0 to 0.5 — Caution — The oscillator is in the upper half of its adaptive range. Valuation is historically elevated, though not yet near a full cycle extreme.
• Above 0.5 — Overheated — The reading is near the top of its decayed historical range. This is an adaptive euphoria signal, not a fixed multiple above realized price.

Use this together with the raw Realized Oscillator. The raw version answers: "how far above or below realized price are we?" This normalized version answers: "how extreme is that reading versus Bitcoin's own history?"