LBI (Liquidity Behavior Index) Explained: One Score for Order Flow

Why a composite score

Each order-flow signal has a blind spot. CVD sees aggression but not resting liquidity. The order book shows resting liquidity but can be spoofed. Footprint data shows per-level battles but is noisy candle to candle. Reading four indicators separately on a phone screen, in real time, is impractical — and they matter most precisely when they agree. LBI encodes that agreement.

What goes into LBI

Four weighted components, each normalized to a common scale:

• Trade flow delta — 35%. The aggressor balance from tick data: are market orders predominantly hitting asks (buying) or bids (selling)? This is the CVD family of information, and it carries the largest weight because executed trades are the hardest signal to fake.
• Liquidity imbalance — 25%. The ratio of resting bid depth to ask depth in the order book. A book stacked with bids leans bullish — with the caveat that resting orders are promises, not trades.
• Spoofing detection — 20%. Output of the manipulation detectors. Detected fake bid walls subtract from bullish readings; fake ask walls subtract from bearish ones. This component exists to discount the imbalance component when the book is being manipulated.
• Footprint analysis — 20%. Per-level buy/sell structure inside recent candles — imbalances and POC positioning, as described in the footprint guide.

The result: +100 means every component points to buyers in control; -100, sellers. Values near zero mean the signals disagree or the market is genuinely balanced — which is information too.

How to read it

• Sign = direction, magnitude = conviction. An LBI of +20 is a lean; +70 is a statement. Treat high-magnitude readings as regimes, not triggers.
• Watch LBI relative to price, not in isolation. Like CVD, its most valuable moments are divergences: price makes a higher high while LBI makes a lower high — the push is losing order-flow support. ChainVol detects these automatically (see Order Flow Divergence).
• Zero-crossings matter more after extremes. LBI oscillating around zero is chop. LBI crossing from +60 territory down through zero is a regime change.

LBI in ChainVol

LBI is available two ways in Chain Studio: as a sub-chart oscillator below the candles, and as Flow Conviction glow — candles glow cyan when order flow is bullish and magenta when bearish, with brightness and glow layers scaling with magnitude. That makes conviction readable at a glance without a separate panel.

Because LBI depends on tick-by-tick trades and Level 2 order book data, it runs at full accuracy for the top 5 coins — BTC, ETH, SOL, XRP, ADA. Details on the Order Flow Analysis page, or watch the LBI video tutorial.