BTC Drop Reflexivity
Measure how a token behaves when Bitcoin drops—a risk signal for market drawdowns.
What is BTC Drop Reflexivity?
BTC Drop Reflexivity measures how much a token typically falls (or rises) relative to Bitcoin during significant BTC price drops. It answers the question: "When Bitcoin drops 5%, does this token drop 5%, 15%, or does it actually hold steady?"
This metric helps you:
Assess downside risk: Understand how exposed a token is to broad market selloffs
Compare relative stability: Find tokens that show strength during BTC drawdowns
Inform position sizing: Higher reflexivity = higher risk during market corrections
Use Cases
Portfolio risk management: Screen out high-reflexivity tokens when reducing risk exposure
Flight to quality: During uncertain markets, identify tokens with lower reflexivity scores
Position sizing: Allocate smaller positions to high-reflexivity assets
Relative value: Compare reflexivity across similar tokens (e.g., competing L1s or DeFi protocols)
How It Works
Calculation
We identify days when Bitcoin drops more than 3% within a 24-hour period
For each drop event, we calculate the reflexivity ratio:
Reflexivity Ratio = Token % Change / BTC % ChangeExample: If BTC drops -5% and a token drops -15%, the ratio is -15% / -5% = 3.0
We compute a rolling median across the last 4-5 qualifying BTC drop events to smooth out noise
What the Ratio Means
< 0
Token gains when BTC drops (very rare, inverse correlation)
0 to 1
Token drops less than BTC (more stable)
= 1
Token drops the same as BTC
> 1
Token drops more than BTC (amplified volatility)
API Response Fields
The btc_drop_reflexivity object is included in the Token Information endpoint response:
signal
number
Primary metric. Rolling 5-drop median reflexivity ratio. Lower is better.
avg_signal
number
TBD
volatility
number
TBD
signal_percentile
number
TBD
score
string
Risk classification: "low", "medium", or "high"
drops_in_window
integer
Number of BTC drop events used in the calculation (4-5 required)
is_stablecoin
boolean
Whether the token is classified as a stablecoin
Note: Returns null if there are fewer than 4 qualifying BTC drop events in the last 365 days.
Interpreting the Results
Example Response
Interpretation: This token typically drops ~1.4x more than Bitcoin during drawdowns (e.g., if BTC drops 5%, expect this token to drop ~7%). The medium score indicates moderate risk. The volatility of 0.31 suggests reasonably consistent behavior. At the 62.5th percentile, it's slightly more volatile than the median token in its market cap tier.
Key Considerations
New tokens: Reflexivity data requires sufficient BTC drop events. Tokens deployed recently may return
null.Stablecoins: Will show values near 0 and are flagged via
is_stablecoin: true.Upside correlation: Tokens with high downside reflexivity often also amplify gains during upswings. High reflexivity doesn't mean "bad", it means higher risk and potentially higher reward.
Slow-changing signal: This is a general risk characteristic, not a real-time alert. It updates only when new BTC drop events occur.
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