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RCPI ETH/BTC Rotation Cycle Index [Dynamic Weights]

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🔄 **RCPI — ETH/BTC Rotation Cycle Index**
*Know exactly when capital rotates between Bitcoin and Ethereum*

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**What is RCPI?**

RCPI is the first composite probability oscillator (0–100) built specifically for the ETH/BTC trading pair. It doesn't measure whether crypto is bullish or bearish — it measures **which asset is about to outperform the other**.

While most traders apply generic indicators to the ETH/BTC chart, RCPI uses 8 rotation-specific sub-indicators including live BTC Dominance data, BTC cycle phase detection, and a mean reversion engine tuned for the ratio's well-documented tendency to oscillate around long-term equilibrium.

The question RCPI answers: **Should I hold ETH or BTC right now?**

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**Why ETH/BTC Needs a Dedicated Indicator**

The ETH/BTC pair follows rotation dynamics, not trend dynamics:

→ **Mean Reversion** — ETH/BTC is one of the most mean-reverting pairs in crypto. Extended deviations from the 200-period mean almost always snap back. RCPI's #1 sub-indicator captures this with a Z-score model.

→ **BTC Dominance Drives Rotation** — When BTC.D falls, capital flows into alts. When BTC.D rises, it flows back. RCPI pulls BTC Dominance data in real-time as a core input.

→ **BTC Cycle Phase Matters** — ETH/BTC behaves differently depending on where BTC is in its own cycle. Late-stage BTC bull → ETH pumps (alt season). Deep BTC bear → ETH/BTC bottoms form. RCPI monitors BTC's MA structure and RSI independently.

→ **Volume Confirms Rotation** — High volume + ratio rising = real capital rotation into ETH. High volume + ratio falling = flight to BTC safety. Low volume moves are noise.

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**🧬 8 Rotation-Specific Sub-Indicators**

These are NOT the same as the Bitcoin or Ethereum versions. Every sub-indicator is purpose-built for pair rotation:

1️⃣ **Mean Reversion Engine** — Z-score of current ratio vs 200-period SMA. The most powerful predictor for ratio pairs. Extreme negative Z = ETH undervalued. Extreme positive Z = ETH overvalued.

2️⃣ **Relative Strength (RSI Inverted)** — Measures momentum of the ratio itself. Oversold ratio = ETH about to outperform. Overbought = BTC about to take the lead.

3️⃣ **BTC Dominance** ⭐ — Pulls live BTC.D data. Tracks dominance vs its own MA50, plus RSI on dominance. Falling BTC.D with RSI < 35 = peak alt season signal.

4️⃣ **Wyckoff Rotation** — Classic phase detection adapted for rotation context. Accumulation in the ratio = smart money positioning into ETH before the move.

5️⃣ **Volume Profile** — Volume directional confirmation. High volume + ratio up = real rotation. High volume + ratio down = ETH exodus. Low volume + ratio down = seller exhaustion (bullish).

6️⃣ **Momentum & Divergence** — MACD + RSI divergence scanner on the ratio. Bearish divergence at ratio peaks historically catches alt season tops.

7️⃣ **Sentiment + Euphoria Detector** — Volatility-based contrarian model with consecutive-bar euphoria penalty. Prolonged ETH outperformance without pullback = reversion imminent.

8️⃣ **BTC Cycle Phase** ⭐ — Pulls BTCUSDT independently. Detects if BTC is in late bull (alt season imminent), early recovery (ETH/BTC bottom forming), mid bull (BTC usually wins), or deep bear (ratio uncertain).

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**⚡ Dynamic Weight System**

Weights rebalance based on which asset is currently dominant:

| Sub-indicator | BTC Dominant | ETH Dominant | Why |
|-----------------|-------------|-------------|------------------------------------------|
| Mean Reversion | 8% | **22%** | Key signal when ETH is overextended |
| Momentum | 8% | **14%** | Divergences catch alt season peaks |
| BTC Dominance | **18%** | 12% | Dominance trends matter more during BTC regime |
| BTC Cycle Phase | **14%** | 8% | BTC's position in cycle drives early rotation |

When ETH is dominating, the system emphasizes overextension signals (mean reversion, momentum divergence). When BTC is dominating, it emphasizes accumulation signals (BTC.D, BTC cycle phase).

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**📖 How to Read**

⬆️ The scale is inverted from what you might expect — **high RCPI = ETH is the better hold**:

🟢 **70–100** — ETH strongly undervalued vs BTC → **Accumulate ETH, reduce BTC**
🟢 **55–70** — Rotation favoring ETH → Overweight ETH
🟡 **45–55** — Neutral → Hold current allocation
🟠 **30–45** — Rotation favoring BTC → Overweight BTC
🔴 **0–30** — ETH overvalued vs BTC → **Rotate to BTC, reduce ETH**

**Practical use cases:**
- **Portfolio rebalancing:** RCPI > 65 → shift allocation toward ETH. RCPI < 35 → shift toward BTC.
- **Alt season timing:** When RCPI drops below 30 after being high → alt season is ending, rotate back to BTC.
- **Accumulation zone:** RCPI > 75 while ratio is at multi-year lows → high-conviction ETH accumulation vs BTC.

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**⚙️ Settings**

| Parameter | Default | Description |
|---------------------|---------|--------------------------------------------|
| EMA Smoothing | 3 | Signal smoothing |
| Mean Reversion Len. | 200 | Lookback for Z-score (longer = more stable)|
| Top Sensitivity | 1.0 | How aggressive overextension detection is |
| Divergence Lookback | 14 | Divergence window |
| BTC Dominance Ticker| CRYPTOCAP:BTC.D | BTC dominance data source |
| BTC Ticker | BINANCE:BTCUSDT | BTC price for cycle detection |

**Recommended:** Weekly (1W) for swing rotation trades. Monthly (1M) for strategic allocation.

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**🔔 6 Alert Conditions**

- RCPI > 70: Accumulate ETH vs BTC
- RCPI < 30: Distribute ETH, favor BTC
- RCPI crosses 50: Rotation direction shift
- Bearish / Bullish divergence in the ratio

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**📌 Best Practices**

✅ Apply directly on the **ETHBTC** chart (Binance, Coinbase, or any exchange)
✅ Compare with BCPI (Bitcoin) and ECPI (Ethereum) for full cycle picture
✅ Weekly timeframe for tactical rotation, Monthly for strategic allocation
✅ Enable "Show Dynamic Weights" to see what's driving the current reading
✅ RCPI works best as a **confirmation tool** alongside your own analysis of BTC dominance and alt season indicators

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**🔗 The CPI Family**

This indicator is part of a three-indicator suite:
- **BCPI** — Bitcoin Cycle Probability Index → Apply on BTCUSD
- **ECPI** — Ethereum Cycle Probability Index → Apply on ETHUSD
- **RCPI** — Rotation Cycle Index → Apply on ETHBTC

Together, they give you the complete macro picture: where BTC is in its cycle, where ETH is in its cycle, and which one you should be overweight.

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**⚠️ Disclaimer**
Educational tool only. Not financial advice. Uses proxy data. The ETH/BTC ratio is influenced by factors beyond what any indicator can capture (regulatory events, protocol upgrades, competitive L1 dynamics). Past performance ≠ future results. DYOR.

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**Tags:** ETH/BTC, Ethereum, Bitcoin, Rotation, Alt Season, BTC Dominance, Mean Reversion, Cycle, Probability, Portfolio, Allocation, Dynamic Weights, Divergence, Composite

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## CATEGORIAS

- **Category:** Oscillators
- **Tags:** ethbtc, ethereum, bitcoin, rotation, altseason, btcdominance, meanreversion, cycle, probability, portfolio, composite

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