How Signals Work
Arcane signals are automated market observations, not trade calls. This page explains how they are detected, scored, and surfaced, what they mean, and where they fall short.
What a Signal Is
A signal is a statistically notable deviation from recent baseline behavior in a crypto asset's price, volume, or volatility profile. Not every deviation matters. A signal that clears our detection thresholds indicates that something shifted enough to warrant attention. It does not tell you what to do about it.
Signals are observations, not recommendations. They exist to surface market state changes faster than a headline-driven news feed would. A signal may turn into a meaningful move, or it may reverse within hours. That uncertainty is part of the system, not a flaw in it.
Asset Universe
Signals are generated across the top 100 crypto assets by market capitalization, filtered to assets actively traded on Kraken in USD pairs. The universe refreshes daily. Assets that enter or exit the top 100 rotate in or out of coverage on the next refresh cycle.
This scope is intentional. Covering a broader universe without liquidity filtering increases false positive rates significantly, particularly for low-cap assets where volume anomalies are common and often meaningless.
Signal Families
Five detection families are active. Each targets a different type of market behavior.
Participation surge relative to the asset's rolling volume baseline. Thresholds are liquidity-tier-aware: larger assets require stronger absolute volume to qualify, since routine moves generate large raw numbers. A volume spike on BTC means something different than a volume spike on a mid-cap token.
A directional price move that clears a short-term high or low with volume confirmation. Detected using both 1h and 4h windows. Requires the price to be above the recent 12-candle range high, not just trending.
ATR-based expansion relative to a lookback baseline. Detects when an asset's average true range moves significantly above its recent norm, which often precedes or accompanies directional moves. Rarer than volume or momentum signals.
Multi-candle consecutive directional movement, measured by accumulated price change across a run of confirming candles. Requires both directional persistence and a minimum move threshold.
Exhaustion patterns: price and volume divergence suggesting the current move is losing momentum. These are the rarest signals and carry the most uncertainty. A reversal watch is not a prediction, it is an observation that conditions associated with reversals are present.
Detection Windows
Each scan cycle analyzes both 1h and 4h OHLCV candles from Kraken alongside 24h ticker data. Signals are detected on both timeframes independently. When both timeframes confirm the same pattern, that multi-timeframe agreement raises the signal's score. Single-timeframe detections that pass thresholds are still surfaced but carry lower confidence.
The scan cycle runs every five minutes. Not every cycle produces new signals. Most cycles produce nothing because the conditions for detection are specific.
Ranking and Importance
Each detected signal receives a priority score from 1 to 10 before surfacing. The score combines several weighted factors:
- Detection strength — how far the anomaly exceeds the detection threshold
- Asset rank — top-10 assets by CoinGecko rank receive a boost; very small assets are penalized
- Market cap tier — large-cap assets require stronger confirmation to avoid routine noise
- Multi-timeframe confirmation — signals confirmed on both 1h and 4h windows score higher
- Signal family rarity — volatility expansion and reversal watches receive a bonus because they are rarer and less prone to false positives than volume spikes
Signals scoring below 5 are not surfaced publicly. The threshold exists to suppress marginal detections that would not be worth a reader's attention.
Confidence vs Severity
These are two separate concepts. Confidence measures signal quality: how cleanly the detection pattern fits, independent of asset size. A high-confidence signal on a small asset may still carry low real-world relevance because the notional volume is too small to matter.
Severity measures real-world importance: how much this signal should concern a market participant, factoring in asset size, absolute volume, price dislocation, and persistence. Critical severity requires strong conditions across multiple dimensions, not just a high confidence score.
Refresh Cadence
Scans run every five minutes. Cooldown windows prevent the same asset-family combination from generating multiple cards within a short period. Cooldown lengths vary by family: volume spikes cool down for two hours, momentum breakouts for 90 minutes.
A new detection for an asset already in cooldown is only surfaced if its priority score exceeds the prior signal by a meaningful margin. This threshold prevents alert fatigue from incremental escalations of an ongoing move.
False Positives and Limitations
The system produces false positives. This is expected. A volume spike that does not lead to a price move is a false positive. A momentum breakout that reverses within two candles is a false positive. We do not filter these out aggressively because doing so would also suppress real early signals.
Known limitations include:
- Wash trading on smaller assets can trigger volume detections that have no real market significance
- Scheduled events (token unlocks, known listings) can cause technically valid detections that carry less surprise value than the signal implies
- Thin-liquidity periods during low-activity hours can produce outsized ratio signals that do not reflect real demand
- The system observes Kraken USD pairs only, so cross-exchange dynamics and non-USD pairs are not captured
Signals should be used as an input, not a conclusion. Check the underlying data before acting.
Why a Signal May Disappear or Cool Down
Signals do not stay on the feed indefinitely. Older signals age out as they become less actionable. A signal that fired 12 hours ago for an event that has since resolved is not useful to a reader encountering it for the first time.
Signals may also be suppressed if a fresher, higher-priority detection for the same asset and family fires within the cooldown window. In that case, the updated signal replaces rather than stacks on top of the prior one.
Raw Anomaly vs Surfaced Card
Not every detected anomaly becomes a signal card. The system detects many more anomalies per scan than it surfaces. An anomaly must clear the minimum priority threshold, pass the cooldown check, and meet the surfacing criteria for its severity level before a card is generated.
This filtering exists to keep the feed meaningful. A feed that shows every sub-threshold anomaly would be unusable. The goal is that every surfaced card reflects something that a serious market participant would find worth knowing.
Editorial Interaction with Signals
Signal cards are generated automatically. The interpretation text, framing, and context narrative are also generated as part of the signal pipeline. These outputs are not manually reviewed before each signal publishes, given the volume and speed involved.
Where a signal event has broader editorial significance, it may also produce or influence a separately written article in the signals category, which does go through the standard editorial review process. Signal cards and editorial articles are distinct products.
What to Infer and What Not to Infer
Reasonable inferences from a signal
- Something unusual happened in this asset's market data in the recent window
- The anomaly was significant enough to clear the detection and priority thresholds
- The pattern resembles [family type] behavior based on the detection criteria
- Other signals on the same asset or sector may provide additional context
What a signal does not tell you
- Whether the price will continue in the indicated direction
- Why the anomaly happened (news event, bot activity, whale accumulation, and technical breakout are all possible)
- What the right position, if any, would be in response
- Whether this signal will resolve as a genuine move or a false positive
Nothing on Arcane Radar is financial advice. See the full disclaimer.
Questions about the signal system? Contact us or visit the Editorial page. For live signals, go to Arcane Signals.