FROTH + Triple Composite — Documentation

Strategy Summary

The FROTH + Triple Composite strategy is a Bitcoin timing system developed by @bitcoindata21. It uses two custom indicators to decide whether to be fully in (100%) or fully out (0%) of Bitcoin. There is no partial sizing — it is binary.

The strategy backtested +965% from Dec 2022 to Mar 2026, versus +322% for buy-and-hold over the same period, with only a −19% max drawdown (vs −50% buy-and-hold) while being in market just 51% of the time.

FROTH Indicator

FROTH is a 0–100 oscillator that measures how "frothy" or overheated the Bitcoin market is relative to its long-term trend. High values signal that price has run far above its historical baseline. Low values signal that price is depressed or undervalued relative to trend.

Scale

How FROTH is approximated in this monitor

The original FROTH formula by @bitcoindata21 is not publicly disclosed. This monitor approximates it using the ratio of Bitcoin's current price to its 200-day Simple Moving Average (SMA), transformed with a logarithm:

// ratio = 1.0 → price exactly at 200d SMA → FROTH ≈ 76.1
// ratio > 1.0 → price above SMA → FROTH rises toward 100
// ratio < 1.0 → price below SMA → FROTH falls toward 0
FROTH = clamp( (ln(price / SMA200) + 0.7693) × 98.96,  min=0, max=100 )

Calibration anchor points

The formula was calibrated using two anchor points derived from @bitcoindata21's published chart:

Key FROTH reference values

Triple Composite (TC)

The Triple Composite is a score from 0 to 3 that counts how many bullish market conditions are currently active. A score of 3 means all three conditions are met — the strongest buy signal. A score of 0 means no bullish conditions are active.

How TC is approximated in this monitor

The original Triple Composite formula is not publicly disclosed. This monitor uses three independent technical signals, each contributing +1 to the score:

Why RSI [40–65] instead of [30–65]?

The RSI floor was raised from 30 to 40 after backtesting revealed that RSI=30–39 often coincides with the immediate aftermath of a sell signal (e.g. Aug 1, 2025: RSI=33, FROTH=89). At that point, momentum is still weak and a re-entry would be premature. Raising the floor to 40 prevents false re-buys in the days following a sell, while still catching genuine recovery entries (e.g. Mar 6, 2026: RSI=50.2).

Why SMA200 Dip Zone instead of price > SMA50?

The SMA200 Dip Zone (price within 0–2.5% below SMA200) catches the moment when price tests the long-term trend line as support. This is the classic "buy the dip" at the 200-day moving average. The condition naturally fails when price is well above SMA200 (bull run, no dip) or far below it (crash, not yet recovered to support). Combined with RSI 40–65, it identifies the precise window when price touches the 200-day level with healthy momentum.

Hybrid TC — backtest results

Old TC component breakdown

Current TC component breakdown (hybrid)

Buy Rules

A buy signal enters the position at 100%. There are two buy rules — either triggers a buy.

Sell Rules

The sell rule is a two-stage process: the sell must first be armed, and then triggered. This prevents premature exits during short FROTH spikes.

Why the two-stage design?

A single threshold exit (e.g. "sell when FROTH > 95") would trigger on short-lived spikes. The two-stage approach ensures the market has been sustainably overheated before committing to an exit. The 90 trigger (not 95) gives the market room to cool slightly before the exit fires — reducing whipsaws.

Signal State Machine

The monitor cycles through these states on every refresh:

Dashboard Values

Streak Counter

The streak counter tracks how many consecutive calendar days FROTH has been at or above 95. It is shown as a number and as a row of dots below the FROTH card.

When FROTH drops below 95 (but is still ≥ 90), the streak resets to 0 but the sell stays armed — it is waiting for the drop below 90. When FROTH eventually drops below 90, the sell triggers and the arm is cleared.

Discord Setup — Overview

The monitor sends alerts through a Discord bot you create and own. The bot calls the Discord REST API to post an embed message. You choose where it lands:

Regardless of mode, setup begins the same way: create a Discord application and a bot.

Step 1 — Create a Discord Application & Bot

Step 2 — Bot Permissions & Intents

Still on the Bot page in the developer portal:

Scroll down to Bot Permissions. You do not need to set anything here — permissions are granted at the channel level when you invite the bot (Step 3).

Step 3 — Invite the Bot to Your Server

This step is only required for Channel mode. For DM mode, skip to Step 4.

Restrict the bot to one channel (recommended)

After inviting, you can limit the bot to only the alert channel so it cannot see other channels:

Step 4 — Enable Developer Mode & Copy IDs

Discord IDs are large numeric strings (e.g. 1234567890123456789). To see them you must enable Developer Mode in Discord.

Copy a Channel ID

Copy a User ID (for DM mode)

Step 5a — Channel Mode Setup

Use this mode to post alerts into a server text channel.

Verify it works

Step 5b — DM Mode Setup

Use this mode to send alerts as a private direct message to a specific Discord user. The bot does not need to be in any server for this to work.

How DM mode works internally

Discord does not let bots post DMs directly to a user ID. Instead the API uses a two-step process:

This means every DM alert makes two API calls. Both are lightweight and within Discord's rate limits.

Verify it works

Alert Reference

All alerts are sent as Discord embeds with a colour-coded left border and footer.

De-duplication

Each signal type (buy / sell) is sent at most once per calendar day, regardless of how many times the monitor refreshes. The date of the last sent signal is stored in state and checked before every send.

FROTH warnings and armed warnings are also capped to once per calendar day each.

Discord — Coolify Environment Variables

The scheduled cron job (check.js) reads Discord credentials from Docker environment variables. Set these in Coolify under Application → Environment Variables.

Troubleshooting

Manual Overrides

Because FROTH and Triple Composite are approximated, the Config panel lets you enter the real values to get accurate rule evaluation and alerts.

Threshold Reference Table

Price Data Source

All BTC price data is fetched from the Binance public API — no account or API key required.

Details

• Base URL: https://api.binance.com
• No API key needed — these are public endpoints
• Rate limit: 1200 requests/minute (well within limits at 4h intervals)
• Price used: daily close price (field index 4 of each kline)
• History: 400 days of daily candles — enough for SMA200 + buffer
• Refreshed: every time the page loads, on manual Check Now, and every 4h via the cron job

Fallback

If Binance is unreachable the check fails with an error logged to the alert log (browser) or /var/log/btc-monitor.log (server). No alert is sent and state is not updated. The next scheduled check will retry automatically.

Approximations & Limitations

FROTH approximation accuracy

The ln-based FROTH formula was calibrated against @bitcoindata21's published chart. It is directionally correct and closely matches key thresholds (sell arm at 95, buy zone below 50), but the actual FROTH may incorporate on-chain data or other proprietary inputs.

TC approximation accuracy

The TC formula uses RSI(14) ∈ [40, 65] and price > SMA50 as its three components. The RSI floor of 40 (vs the original 30) was chosen to prevent instant re-buys after sell signals when RSI is still depressed. The SMA200 condition was replaced by splitting RSI into two separate conditions (floor and cap) for finer momentum discrimination.

For the real FROTH and TC values, check @bitcoindata21 on X/Twitter.

RSI calculation note

The RSI used for TC is a simplified version (averages the last 14 absolute gains/losses). A full Wilder's RSI uses exponential smoothing and requires a warm-up period of at least 28 candles. The simplified version may differ by 1–5 RSI points in practice.

Browser alerts require the page to be open

The browser webapp only checks rules when the page is open and refreshing. For 24/7 automated alerts, use the Coolify / Docker deployment — the cron job runs every 4 hours regardless of whether the browser is open.

Calibration Log

History of formula changes and the reasoning behind each recalibration.

FROTH: log₂ → ln recalibration

Triple Composite: three iterations of calibration

Key date verification

Hosting — Coolify

The monitor runs as a single Docker container managed by Coolify. nginx serves the web UI, and a cron job runs check.js every 4 hours automatically.

Environment variables

DNS

Add an A record pointing your subdomain to the server IP. Coolify (Traefik) handles HTTPS automatically via Let's Encrypt once the DNS resolves.