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.
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.
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.
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.
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).
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).
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.
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.