Market Reversal Engine (MRE)

Overview

The Market Reversal Engine is a custom alerting system that detects potential market tops and bottoms. It leverages the Altcoin Market Scorecard (AMS), Multi-timeframe Momentum Scorecard (MMS), and Global Liquidity Scorecard (GLS) to identify overbought and oversold conditions across multiple asset classes.

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Alert Types

• AMS M6 Global Stablecoin Dominance — Fires when altcoins are oversold or overbought as a whole, based on stablecoin dominance metrics.
• BTC/USD reversals — Detects potential tops and bottoms in Bitcoin.
• ETH/USD reversals — Detects potential tops and bottoms in Ethereum.
• SOL/USD reversals — Detects potential tops and bottoms in Solana.
• Top stock indices (SPX, NDX, etc.) — Monitors major equity benchmarks for reversal conditions.
• Top individual stocks — Tracks high-impact individual equities for extreme readings.

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Timeframes

• Short-term (15m to 4hr) — Intraday scalp opportunities. Best for active traders looking for quick reversals within the day.
• Mid-term (Daily to Weekly) — Swing trade setups. Captures multi-day to multi-week turning points.
• Long-term (2W to Monthly) — Major trend reversals and macro shifts. These are high-conviction signals that occur less frequently but carry significant weight.

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How Reversals Are Detected

The engine combines multiple confluence signals to identify reversals:

• Momentum divergence — Price makes a new high/low but momentum indicators do not confirm.
• Extreme readings on the AMS scorecard — Altcoin market health reaches historically extreme levels.
• Liquidity flow shifts from GLS — Global liquidity conditions change direction, removing or adding support for asset prices.
• Multi-timeframe momentum alignment from MMS — Multiple timeframes simultaneously reach overbought or oversold conditions.

When 3 or more signals align, a reversal alert fires. The more signals in confluence, the higher the conviction of the alert.

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Reading Alerts

Each alert displays:

• Asset — The ticker or pair being flagged.
• Current price — Price at the time the alert was generated.
• Condition — Either OVERBOUGHT (potential top) or OVERSOLD (potential bottom).
• Timeframe — The timeframe on which the signal was detected.
• Triggering signals — The specific indicators that fired to create the alert.

Color coding: GREEN = oversold (potential bottom, buying opportunity). RED = overbought (potential top, consider taking profit or hedging).

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Delivery

Alerts are posted to the Blockcircle Discord in real-time. Premium subscribers receive them instantly as they fire. Free users see delayed alerts (approximately 17 days delay).

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Underlying Engines

• AMS (Altcoin Market Scorecard) — Tracks altcoin market health via stablecoin dominance metrics. Identifies when the broader altcoin market is at extremes.
• MMS (Multi-timeframe Momentum Scorecard) — Scores momentum across 5+ timeframes per asset. Provides granular momentum health data for individual assets.
• GLS (Global Liquidity Scorecard) — Monitors global central bank liquidity flows across 8 central banks. Establishes the macro liquidity backdrop driving all asset classes.

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Tips

• Do not trade against the prevailing trend — reversals confirm turning points, they do not predict them in advance.
• Use higher timeframe signals (Daily, Weekly, Monthly) for higher conviction trades.
• Combine MRE alerts with your own technical analysis for the best results.
• Pay attention to alerts where multiple assets show the same condition simultaneously — this indicates a market-wide shift rather than an isolated move.
• Use short-term alerts for tactical entries and long-term alerts for strategic positioning.