Methodology
How the Gresham Index works
The Gresham Index is a single number between 0 and 1 that answers one question: where are we in Bitcoin's market cycle right now?
It is not a prediction. It doesn't forecast price, call tops, or name bottoms. It reads seven measurements of the market's condition and expresses them as one position on a scale — the way a barometer reports pressure without claiming to know tomorrow's weather.
Everything below is the complete method, including what we tested and threw away.
What the number means
The index is a percentile rank against Bitcoin's own history.
A reading of 0.15 doesn't mean "Bitcoin is 15% expensive." It means: of all the days in the comparison window, only about 15% looked cheaper on these measurements than today does. A reading of 0.90 means today sits in the top tenth of that history.
That framing is what keeps the scale meaningful from $300 to $120,000. Bitcoin's absolute values change by orders of magnitude across a decade; its relative extremes recur.
So the historical readings on our chart are what the method would have printed on that day. Readings published since 13 July 2026 aren't reconstructions at all — they're the actual daily output, timestamped as published. That boundary is marked on every chart.
The seven indicators
Three families, because different kinds of evidence fail at different times. Price measures saturate in long bull runs. On-chain measures distort when holder behaviour shifts structurally. Momentum can stay hot for months. Requiring agreement across families is what stops any single distortion from running the reading.
How far price has stretched from its own long-run behaviour.
| Indicator | In family | What it measures |
|---|---|---|
| Mayer Multiple | 30% | Price relative to its 200-day average |
| 200-week extension | 30% | Price relative to its 200-week average |
| Log-regression deviation | 40% | Price relative to a regression fitted only on past data, refit as history accumulates |
What holders and miners are actually doing, rather than what price is doing.
| Indicator | In family | What it measures |
|---|---|---|
| MVRV-Z | 40% | Market value against the aggregate price at which coins last moved, scaled by its own historical variability |
| NUPL | 30% | Net unrealised profit or loss held across the network |
| Puell Multiple | 30% | Miner revenue relative to its own annual average |
| Indicator | In family | What it measures |
|---|---|---|
| Monthly RSI | 100% | Whether the current move has cycle-scale conviction, measured on monthly closes |
Momentum carries the single largest individual weight, and it is deliberately slow — measured on monthly rather than daily closes. That is what stops the index getting excited about a strong quarter.
WHAT EACH INDICATOR CONTRIBUTES TO THE FINAL NUMBER
How the seven become one
That is the entire calculation. The two ranking windows are averaged equally: the four-year window catches relative extremes, the eight-year window carries long memory and stops the scale saturating mid-cycle.
The weights were set before any backtest was run, from reasoning about what each family measures, and haven't been tuned since.
Why seven, and not just the best one?
We ran each indicator alone, through the same pipeline, judged the same way.
The Mayer Multiple — the most cited Bitcoin valuation measure there is — was among the false alarms, and used on its own over the full period it did worse than a plain fixed schedule.
One indicator did survive every test. But you only know which one afterwards, and picking the survivor in hindsight isn't a method. The composite needed no such guess: it worked in every cycle without anyone having to choose correctly in advance.
What we tested and left out
Tested directly, both directions, with a realistic publication lag. It made the index worse — and the intuitive version, treating tight liquidity as elevated risk, would have argued against accumulating at the November 2022 bottom, the best entry in the dataset.
We'd rather say so than imply an experiment we didn't run. It's vendor-proprietary and unauditable, its history is short and its definition moves, and it mostly measures the crowd reacting to price — which is price again.
Tested as an overlay. It made the backtest slightly better, and we left it out anyway: a metric that assumes the four-year rhythm persists will fail exactly when that rhythm breaks.
The zones
Readings are grouped into seven named zones for readability. Four accumulation bands, two distribution bands: the asymmetry is honest. Bitcoin spends most of its life accumulating — the index has never printed above 0.926. A symmetric scale would have meant inventing gradations where the market almost never goes.
Neutral is the hinge rather than a step — the band where accumulation conditions have ended and distribution conditions haven't begun.
The data, and the rhythm
The index is computed once a day from the previous day's confirmed close, using price and on-chain data from the CoinMetrics Community API, and published automatically.
The reading always reflects a settled, verified day rather than an unconfirmed tick. A number that changed every five minutes would invite exactly the reactive behaviour a cycle indicator exists to replace. If the data falls more than 48 hours behind, the site says so rather than showing a quietly outdated number.
What the index deliberately doesn't do
Check it yourself
The test vectors
Nineteen dated readings the engine must reproduce exactly. Every daily run re-proves all nineteen before it may publish; a failed check blocks that day's number.
The daily record
Every reading since publication began — append-only, timestamped by version control, impossible to edit quietly after the fact.
This page describes a measurement. What we do with a measurement is a separate question, answered separately — see the strategies.