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SETUP.md

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Quick Setup Guide

1. Install Dependencies

npm install

2. Get FRED API Key (Free)

  1. Visit: https://fred.stlouisfed.org/docs/api/api_key.html
  2. Sign up for a free account
  3. Generate an API key
  4. Create .env.local file in the root directory:
FRED_API_KEY=your_api_key_here

Note: The app will work with the demo key, but it has strict rate limits. Get your own key for production use.

3. Run the Development Server

npm run dev

Visit http://localhost:3000 to see the dashboard.

4. Understanding the Data

US Liquidity Components

  • Fed Balance Sheet (WALCL): Total assets held by the Federal Reserve
  • Treasury General Account (TGA): Treasury's operating account at the Fed
  • Reverse Repo (RRP): Overnight reverse repurchase agreements
  • US Liquidity: Calculated as Fed Balance Sheet - TGA - RRP

ISM Manufacturing PMI

  • Currently uses FRED's NAPM as a proxy
  • For accurate ISM PMI, you'll need to:

Bitcoin Direction Index

The index combines:

  • 40%: US Liquidity (z-score normalized)
  • 35%: ISM PMI (normalized around 50)
  • 25%: Bitcoin price momentum (short vs medium-term)

5. Testing the Correlation

To test if the index correlates with Bitcoin price:

  1. The app calculates correlation when historical data is available
  2. For accurate correlation analysis, you'll need to:
    • Store historical index values in a database
    • Store historical Bitcoin prices
    • Calculate correlation over time periods (30-day, 90-day, etc.)

Troubleshooting

API Errors

  • FRED API: Check your API key is correct in .env.local
  • Bitcoin API: Coinbase API is public and should work without issues
  • PMI: If you see placeholder data, that's expected - integrate a real PMI source

Build Errors

  • Make sure all dependencies are installed: npm install
  • Check TypeScript errors: npm run build

Data Not Updating

  • The dashboard auto-refreshes every 60 seconds
  • Click the "Refresh" button to manually update
  • Check browser console for API errors