BTCUSD Price Overextension from Configurable SMAs

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BTCUSD Price Overextension Indicator with Configurable SMAs

This indicator helps identify potential correction points for BTCUSD by detecting overextended conditions based on customizable short-term and long-term SMAs, average price deviation, and divergence.

Key Features:

Customizable SMAs: Set your own lengths for short-term (default 20) and long-term (default 50) SMAs, allowing you to tailor the indicator to different market conditions.
Overextension Detection: Detects when the average price over a set period (default 10 bars) is overextended above the short-term SMA by a configurable adjustment factor.
Divergence Threshold: Highlights when the short-term and long-term SMAs diverge beyond a specified threshold, signaling potential trend continuation.
Conditional Highlight: Displays a red background only when all conditions are met, and the current candle closes at or above the previous candle. A label "Overextended" appears only on the first bar of each overextended sequence for clear identification.

How to Use:

Identify Correction Signals: Look for red background highlights, which indicate a potential overextension based on the configured SMA and divergence thresholds.
Adjust Parameters: Use the adjustment factor, divergence threshold, and SMA lengths to fine-tune the indicator for different market environments or trading strategies.

This tool is ideal for BTCUSD traders looking to spot potential pullback areas or continuation zones by analyzing trend strength and overextension relative to key moving averages.