Macro Backdrop
What it measures
Seven series from traditional markets, sourced from FRED (the Federal Reserve's public economic database) and gold's spot price, that together describe the broader liquidity and risk-appetite environment bitcoin trades inside. None of these are bitcoin-specific - they're the same backdrop every risk asset trades against - which is exactly why they're one context module on the Read, not a driver of the classifier's core state.
M2 Money Supply
The total supply of US dollars in circulation and in easily-accessible deposits. A broad proxy for how much liquidity exists in the financial system overall.
Fed Funds Rate
The Federal Reserve's target interest rate. Higher rates make holding non-yielding assets (bitcoin, gold) relatively more costly versus cash or bonds; lower rates ease that cost.
2s10s Treasury Spread
The gap between the 10-year and 2-year US Treasury yields. A widely-watched recession/risk-appetite indicator - a negative ("inverted") spread has historically preceded economic slowdowns, though with long and variable lags.
DXY (Dollar Index)
A broad measure of the US dollar's strength against a basket of other currencies. Bitcoin, like most dollar-priced assets, has tended to move inversely with a strengthening dollar, though the relationship is not fixed.
10-Year Real Yield
The 10-year Treasury yield adjusted for expected inflation - the "real" (after inflation) return on holding a safe, interest-bearing asset. Higher real yields raise the opportunity cost of holding a non-yielding asset like bitcoin.
High-Yield Credit Spread
The extra yield investors demand to hold riskier ("high-yield" or "junk") corporate bonds over safe Treasurys. A widening spread signals rising risk aversion across markets generally, not just in crypto.
Gold
Gold's spot price. Sometimes discussed as a comparison asset for bitcoin's own "digital gold" framing - both are non-yielding, scarcity-based stores of value, though they don't reliably move together.
Formula
No single formula - each series above is a distinct third-party economic indicator, sourced as published, not recomputed here.
Normal range
Each series has its own typical range and units (a percentage rate, a dollar figure, an index level) - read via each series' own trend and historical context rather than one shared threshold across all seven.
How it fails
None of these seven series are bitcoin-specific, and macro/bitcoin correlations have shifted over time rather than holding as a fixed relationship - a relationship that has held for a stretch (e.g. bitcoin trading like a high-beta risk asset alongside equities) can weaken or reverse without warning. Treat this module as context for the other modules' readings, not a standalone signal.
Related metrics
MVRV, DVOL
Bull read
A generally easing backdrop (falling rates, falling real yields, tightening credit spreads, a softening dollar) has historically coincided with more supportive conditions for risk assets generally, bitcoin included.
Bear read
A tightening backdrop (rising rates, rising real yields, widening credit spreads, a strengthening dollar) has historically coincided with more pressure on risk assets generally - but bitcoin has both tracked and diverged from this backdrop at different points, so it's context, not a forecast of how bitcoin specifically will respond this time.