Distressed Inflow Pressure Index (DIPI)

SQL of the Week 017

How Overloaded Are Exchanges With Loss-Making Coins?

What Is This?

DIPI (Distressed Inflow Pressure Index) - a weekly index that measures the real selling pressure of loss-making coins on exchanges.

Standard exchange inflow only tells you about volume. DIPI answers a different question: how much Bitcoin is flowing onto exchanges at a loss - and how anomalous is that relative to the norm of the past year?

The model is built on several components that you can see directly on the chart.

Three Components of the Model

Loss Ratio - share of loss-making inflow (black area on the chart)

For each week, the model compares the average purchase price of coins arriving on exchanges with the current price. If coins were bought at a higher price than they are worth now - they are at a loss.

Loss Ratio = 0 means all inflow is arriving in profit. Loss Ratio = 1 means all inflow is deeply at a loss. The black area beneath the purple DIPI bars shows how large this share is at any given moment.

LTH inflow share % - share of old coins (blue bars)

The share of coins older than 6 months among all inflow onto exchanges. When long-term holders start bringing coins to exchanges - this is structurally different from a situation where recent buyers are selling.

DIPI % - the resulting signal (purple bars)

A combination of both components, normalized against the norm of the past 52 weeks. The Z-score shows how much current pressure deviates from what was normal in the past year.

Interpretation Regimes