OPEN-SOURCE SCRIPT
Bitcoin Cost Of Production
Description
This indicator estimates a Bitcoin “Cost Floor” proxy using network difficulty as a substitute for direct energy costs. The goal is not to compute real-world mining costs, but to display a structural cost-pressure baseline derived from on-chain and market data.
The model is intentionally simple and uses two externally fitted parameters (alpha, k).
No fitting is performed inside Pine.
How the model works
The cost proxy is defined as:
Cost Floor = alpha ⋅ Difficulty^k / Issuance
Inputs:
• Difficulty (GLASSNODE:BTC_DIFFICULTY)
• Issuance = Subsidy ⋅ Blocks Mined + Fees_BTC
Parameters (fitted externally in Python):
• alpha: scaling factor to map the proxy into price space (USD).
• k: damping exponent on difficulty. This reduces the sensitivity of the model to long-term technological progress and efficiency gains in mining hardware.
What the indicator displays
• Smoothed Cost Floor (purple)
• Cost Zone (purple zone): Cost × 1.2
• Raw Cost Floor (yellow, optional)
How to use it
This is not a timing tool. It provides a macro context for where price trades relative to a difficulty/issuance-based cost-pressure proxy.
It may be useful for:
• cycle context (stress vs relief regimes)
• comparing price drawdowns against a structural baseline
• studying long-term support behavior during miner stress phases
Important notes
• This indicator does not repaint.
• This script is designed only for INDEX:BTCUSD.
• It does not provide trading signals or financial advice.
This indicator estimates a Bitcoin “Cost Floor” proxy using network difficulty as a substitute for direct energy costs. The goal is not to compute real-world mining costs, but to display a structural cost-pressure baseline derived from on-chain and market data.
The model is intentionally simple and uses two externally fitted parameters (alpha, k).
No fitting is performed inside Pine.
How the model works
The cost proxy is defined as:
Cost Floor = alpha ⋅ Difficulty^k / Issuance
Inputs:
• Difficulty (GLASSNODE:BTC_DIFFICULTY)
• Issuance = Subsidy ⋅ Blocks Mined + Fees_BTC
Parameters (fitted externally in Python):
• alpha: scaling factor to map the proxy into price space (USD).
• k: damping exponent on difficulty. This reduces the sensitivity of the model to long-term technological progress and efficiency gains in mining hardware.
What the indicator displays
• Smoothed Cost Floor (purple)
• Cost Zone (purple zone): Cost × 1.2
• Raw Cost Floor (yellow, optional)
How to use it
This is not a timing tool. It provides a macro context for where price trades relative to a difficulty/issuance-based cost-pressure proxy.
It may be useful for:
• cycle context (stress vs relief regimes)
• comparing price drawdowns against a structural baseline
• studying long-term support behavior during miner stress phases
Important notes
• This indicator does not repaint.
• This script is designed only for INDEX:BTCUSD.
• It does not provide trading signals or financial advice.
オープンソーススクリプト
TradingViewの精神に則り、このスクリプトの作者はコードをオープンソースとして公開してくれました。トレーダーが内容を確認・検証できるようにという配慮です。作者に拍手を送りましょう！無料で利用できますが、コードの再公開はハウスルールに従う必要があります。
免責事項
この情報および投稿は、TradingViewが提供または推奨する金融、投資、トレード、その他のアドバイスや推奨を意図するものではなく、それらを構成するものでもありません。詳細は利用規約をご覧ください。
オープンソーススクリプト
TradingViewの精神に則り、このスクリプトの作者はコードをオープンソースとして公開してくれました。トレーダーが内容を確認・検証できるようにという配慮です。作者に拍手を送りましょう！無料で利用できますが、コードの再公開はハウスルールに従う必要があります。
免責事項
この情報および投稿は、TradingViewが提供または推奨する金融、投資、トレード、その他のアドバイスや推奨を意図するものではなく、それらを構成するものでもありません。詳細は利用規約をご覧ください。