Reversal Index

A reversal index attempts to compress multiple overbought/oversold and divergence signals into a single reading that flags where a trend may be exhausting. Such composites typically combine momentum, volume confirmation and sentiment extremes.

The chronic flaw of composite reversal indicators is overfitting: component weights are usually optimised on historical data, and out-of-sample performance is typically far worse than the backtest. Treat such a reading as an attention allocator rather than a trade signal — an extreme print means other evidence is worth examining, not that a contrarian position is warranted. In trending markets reversal signals fail continuously for months, so any strategy built on one requires explicit stops and position limits.

Cycle metrics answer where the market sits within a bull/bear cycle, not which way the next candle goes. Their shared weakness is lag and threshold drift: the same reading meant different things in 2017 and 2025, so compare like cycle-phase with like rather than applying fixed numeric thresholds.

The live chart for this metric is still being wired up. Dozens of comparable cycle metrics with full history are already available in the CoinBoss Indicators Hub — see the links below.