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A 3-layer detection system for early crash warning
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The Macro Risk Engine is a 3-layer detection system that provides early warning of elevated crash risk weeks to months in advance by analyzing macro economic stress patterns across traditional and crypto markets.
Unlike reactive indicators (like VIX) that only confirm current fear, our engine aims to anticipate stress buildups before prices crash.
MSI provides a single 0-100 score representing overall market stress across crypto and traditional markets.
Calm, low stress
Moderate stress, watch carefully
Significant stress, reduce risk
Severe stress, defensive positions
UI Note: These ranges are frontend display bands only (for readability). The backend engine does not use these boundaries; alert logic uses proprietary, adaptive rules.
MSI aggregates multiple stress signals:
How far have assets fallen from recent highs? Rapid drops indicate panic selling
Are markets moving erratically? High volatility = uncertain/fearful conditions
Are corporate bond spreads widening? Credit freezes precede major crises
Are bank stocks underperforming? Banking stress amplifies systemic risk
Are crypto and TradFi moving together? High correlation = systemic risk
Treasury yields, dollar strength, funding rates, etc.
All these inputs are normalized and combined using a proprietary weighting system to produce the final 0-100 MSI score.
Unlike single-metric indicators (like just VIX or just BTC drawdowns), MSI sees the full picture across multiple markets and asset classes.
This multi-dimensional approach catches:
EWI monitors how MSI is changing and provides tiered alerts when stress is building rapidly.
EWI doesn't just look at current MSI levels - it analyzes:
Is MSI rising quickly? Sudden stress increases precede crashes
Is MSI staying high for extended periods? Sustained stress often precedes breaking points
Are we seeing familiar pre-crisis patterns? History doesn't repeat, but it rhymes
Are multiple stress signals triggering together? Compound signals = higher conviction
This is your actionable signal layer.
YELLOW = Start paying attention
ORANGE = Review your positions
RED = Take defensive action
Historical Performance (35+ years, 1990–2026):
MTW provides risk management context by detecting prolonged stress patterns and sustained regime shifts (not just temporary spikes).
MTW uses proprietary pattern detection to identify:
Sustained high stress over extended periods. Brief spikes resolve quickly; sustained stress indicates regime shifts
Stress that drops but then re-emerges. Indicates continued underlying fragility
Repeated tests of high stress levels. Patterns that suggest systemic vulnerability rather than isolated events
When MTW activates, it indicates that elevated stress is sustained and structural, not just transient volatility.
MTW helps distinguish between:
Temporary Volatility
Single-day spikes, flash crashes
Sustained Regime Shifts
Prolonged stress indicating structural risk
This provides additional context for risk management decisions during extended stress periods.
The engine analyzes 15+ publicly available data sources:
All data is public. Our value is in HOW we analyze and combine it, not in having exclusive data.
This product incorporates aggregated and transformed data from publicly available sources:
All raw data is normalized, transformed, and combined into proprietary risk indicators. Only derived scores and signals are displayed — raw source data is not exposed directly. This product is not endorsed by or affiliated with any data provider.
All calculations use only data available at that point in time. No future information is used to generate signals. The 1990–2005 data was never used during development — pure out-of-sample.
The engine has been validated across 4 decades:
A raw-diagnostic stability check shows broadly consistent ORANGE+ episode clustering across all 4 decades. This is presented as a diagnostic view, not as the live production false-positive policy metric.
The engine has been tested under varied configurations to ensure results are robust and not dependent on exact parameter choices. All events are selected algorithmically from price data — no human curation.
| Traditional Indicators | Macro Risk Engine |
|---|---|
| Confirm current fear | Flag elevated crash risk |
| Spike DURING crashes | Often signals earlier in stress build-ups |
| Hours/days notice | Weeks/months notice |
Works across crypto AND traditional markets:
Tiered to manage alert burden:
15/15 BTC ≥20% and 13/13 SPY ≥10% drawdowns detected across 35+ years of data (1990–2026), plus 5/5 pre-2006 out-of-sample crises
Live forward performance tracking is active — every signal timestamped and logged.
The exact algorithms, thresholds, and weighting systems used to calculate MSI, EWI, and MTW are proprietary and remain confidential.
We Share:
We Protect:
See detailed validation metrics and crisis detection history
Find answers to common questions about the engine
View current market stress levels and alerts
Disclaimer: The Macro Risk Engine is a tool for risk assessment and should be used as part of a comprehensive investment strategy. Past performance does not guarantee future results. Users should conduct their own due diligence and consult with financial advisors before making investment decisions.