Trinity Liquidity Composite (TLC)TRINITY EXCLUSIVE

Trinity exclusive model

This metric is a proprietary Trinity Insights model. Its formula, inputs, weights and parameters are NOT disclosed. The page documents only the output (bounded scale, interpretation zones, historical context). Access to the score and its time series is via the REST API and the MCP server, subject to the required tier.

What is it?

TLC is a Trinity proprietary composite scored 0-100 that aggregates the five most decisive components of the global macro liquidity tide: the Federal Reserve Net Liquidity (Federal Reserve balance sheet (total assets) minus Treasury General Account minus Reverse Repo), the year-over-year change in U.S. M2 money supply, the second derivative of Fed Net Liquidity (capturing acceleration or deceleration), the USD reserve currency status proxied via the Trade-Weighted Dollar Index, and a China credit impulse component. Each component is normalised via 5-year rolling percentile rank to produce a single bounded score that captures whether the macro liquidity environment is broadly expanding, contracting or neutral.

How to read

Values above 70 indicate an expansionary liquidity regime - central bank balance sheets growing, M2 accelerating, weak dollar, supportive credit conditions. Values below 30 indicate a contractionary regime - balance sheet runoff, M2 decelerating, strong dollar, tight credit. The 50-line is the 5-year rolling neutral. The decomposition sub-pane reveals which of the five components is driving the score, providing transparency on whether the regime is Fed-driven, M2-driven, dollar-driven or credit-driven. Vertical markers annotate FOMC decisions, ECB Governing Council rate decisions, BoJ policy meetings, and major liquidity regime shifts.

Key zones

• Above 80: Extremely expansionary regime - historical late-bear / early-bull liquidity contexts • 70-80: Expansionary regime - broadly favourable to risk assets • 50-70: Neutral-to-positive transition • 30-50: Neutral-to-negative transition, watch for component divergences • Below 30: Contractionary regime - historical late-bull / early-bear contexts • Below 20: Extremely contractionary - Fed runoff + USD strength + M2 deceleration simultaneously

What to observe

• TLC crossing above 50 from sustained below: liquidity regime flip toward expansion, often early-cycle accumulation phase • TLC crossing below 50 from sustained above: liquidity regime flip toward contraction, late-cycle warning • TLC declining while equities rally: regime fragility, divergence between price and macro liquidity • Single-component dominance (e.g., TLC drop driven entirely by Fed runoff): localised stress, less durable than 5-component agreement • Sustained TLC > 75 alongside expanding central bank balance sheets: rare regime, often precedes durable risk asset rallies

Historical context

Across past Bitcoin cycles, TLC reached values above 80 during the post-COVID liquidity flood (March 2020-late 2021), the late-2023 disinflation pivot, and selected mid-cycle pause periods. Values below 30 marked the 2018 Fed quantitative tightening cycle, the 2022 aggressive balance sheet runoff, and brief stress events. The 5-year rolling percentile normalisation ensures historical comparisons remain meaningful even as the absolute levels of central bank balance sheets and money aggregates drift over decades.

Expert notes

⚠️ Trinity Exclusive Model - No industry reference publication. Trinity proprietary moat composite (P3 tier, signature feature 1/6). Component weights are calibrated empirically via walk-forward validation across multiple liquidity regimes; the precise weighting is part of the proprietary moat and not disclosed publicly. The China credit impulse component falls back to a neutral 50th percentile placeholder when data is unavailable, preserving the integrity of the other four components. Cross-rubric position: TLC operates in the Macro Intelligence scope. Distinct from on-chain liquidity flow indicators (which measure exchange reserves and stablecoin supply on-chain). The two readings are complementary: TLC = macro tradFi liquidity tide, on-chain flows = crypto-native liquidity flows.

Common mistakes to avoid

• 'TLC > 70 = automatic risk-on entry' - TLC is a regime indicator, not a timing tool. Liquidity regimes can persist for months without triggering immediate price moves. • 'TLC < 30 = automatic risk-off' - Contractionary regimes have historically lasted 6-18 months. Patience in transitions matters more than reaction to single readings. • 'TLC replaces individual components' - TLC complements them. Use the decomposition sub-pane to identify which component is driving the score for diagnostic clarity. • 'High TLC with falling equities = TLC is broken' - Often the inverse: such divergences historically resolve via equity catch-up, not TLC reversion.

Programmatic access

REST API

curl -sS \
  'https://api.trinityinsights.io/api/v1/macro-intelligence/macro-v2-trinity-liquidity-composite/history?days=90' \
  -H 'X-API-Key: $TRINITY_API_KEY'

MCP server

{
  "tool": "get_chart_value",
  "metric_id": "macro-v2-trinity-liquidity-composite",
  "timeframe": "1y"
}

Required tier: performance. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.

Related metrics

• macro-v2-net-liquidity-multi-cb
• macro-v2-liquidity-impulse-2nd-derivative
• macro-v2-reserve-currency-status

Institutional disclaimer

Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.