Backtests & Proof — LSRI Crypto

Metric	Result
Period tested	2019–2025 (see validation below)
Stress / Critical regimes detected	—
Assets covered	BTC, ETH, SOL, BNB, XRP, DOGE
Update frequency	Daily close · Mon–Fri 20:00 UTC

LSRI is not magic. It is a structural regime filter built to detect when market structure shifts from healthy to fragile. Here is what that transition looked like in real market cycles.

🎯 The Core Metric

LSRI measures when asymmetry accumulation (price + volume imbalance) crosses critical thresholds and signals that market structure is becoming fragile. When the regime degrades, the goal is not to call the exact bottom, but to help users slow down and manage exposure earlier.

Intuitively, fragility tends to rise when price behavior and participation stop confirming each other cleanly. A market can still look superficially stable while the underlying structure becomes weaker, thinner, and more one-sided.

Across 3 major bear cycles (2018, 2020, 2022), LSRI entered Stress or Critical 19–60 days before the worst drawdown. See the cards below for lead times by event.

Quantitative Validation Snapshot

Transitions Observed

—

Across all tracked assets and recorded history.

Stress / Critical Share

Measured from regime changes stored in history.

Negative Follow-through

—

30d follow-through: —

Average Return After Stress

—

30d average: —

Worst Case After Stress

—

30d worst case: —

Assets Covered

—

7d samples: — · 30d samples: —

Metrics below are computed from historical LSRI regime transitions stored in the system. `7d` and `30d` returns are measured forward from the transition date using daily closing prices, and only counted when enough future history exists. If the public transition store is still sparse, the validation cards and case tables stay in bootstrap mode instead of implying missing evidence.

Bootstrap note: this page becomes more quantitative as more LSRI transitions accumulate in the public store. When the dynamic cards still show sparse or partial evidence, interpret that as a live work-in-progress state, not as hidden or manufactured data.

How Metrics Are Computed

Step 1

Detect regime transitions

We do not score every daily snapshot. We first isolate the dates where LSRI changes regime, because transitions are the moments that matter most for risk management.

NORMAL → VIGILANCE VIGILANCE → STRESS STRESS → CRITICAL

Step 2

Measure forward returns

For each `Stress` or `Critical` transition, we measure the forward move from the transition close to the close `7` and `30` trading days later.

7d return = (P[t+7] / P[t] - 1) * 100 30d return = (P[t+30] / P[t] - 1) * 100

Example: if BTC is at `40,000` when LSRI enters Stress and closes at `32,000` seven trading days later, the 7d return is `(32,000 / 40,000 - 1) * 100 = -20%`.

Step 3

Aggregate and compare

We then aggregate those stress cases into percentages, averages, worst cases, and asset-level breakdowns. If there is not enough future history, that sample is excluded instead of guessed.

% negative = negative samples / valid samples average = sum(returns) / valid samples worst case = minimum return observed

Important: these metrics describe what happened after historical LSRI regime transitions. They are designed to quantify structural follow-through, not to promise future price direction.

Recent Stress / Critical Cases

Concrete transition samples pulled from the stored LSRI history. These are the kinds of events behind the validation metrics above.

Asset	Date	Regime Change	Price	7d Return	30d Return
Loading recent stress / critical cases...

`30d Return` shows `Pending 30d window` until 30 trading days have passed after the transition date.

Case Study

BTC 2018 Bear Market

LSRI shifted into higher-risk territory before the final capitulation phase of the 2018 bear cycle. The point was not to predict the exact low, but to show deterioration well before the most painful part of the move.

Stress / Critical signal

Nov 13, 2018

Worst lows

Dec 13-16, 2018

Lead time / drawdown

30-32 days · about -81%

Case Study

BTC 2020 COVID Crash

The COVID shock was much faster than a long bear market, but LSRI still moved from calm conditions toward stress before the March panic lows. This makes it a useful stress test for the framework.

Stress signal window

Early March 2020

Major low

Mar 12-13, 2020

Lead time / drawdown

Days, not hours · about -50%

Case Study

BTC 2022 Crypto Winter

This is the clearest public LSRI example on the site. Vigilance appeared first, then Stress, then Critical before the deepest part of the 2022 selloff fully unfolded across the market.

Stress / Critical signal

Oct 26, 2022

Worst selloff phase

Mid-Nov 2022

Lead time / drawdown

19+ days · about -75% to -80%

Asset	Stress Cases	Neg 7d	Neg 30d	Avg 7d	Avg 30d	Worst 7d	Worst 30d	Samples
Loading asset breakdown...

Major Bear Cycles

₿

2018 Bear Market

LSRI entered STRESS 32 days before the bottom.

Max Drawdown

−80% to −81%

December 2018 from November 2017 peak

LSRI Signal

30–56 days

Lead time before worst lows

Alert Date

Nov 13, 2018

LSRI entered Stress/Critical

₿ Ξ

2022 Crypto Winter

LSRI entered STRESS 19+ days before the worst selloff.

Max Drawdown

−75% to −80%

BTC & ETH from cycle high (Nov 2021)

LSRI Signal

25–60 days

Lead time before major selloff cascade

Alert Date

Oct 26, 2022

Stress/Critical detected 19+ days early

◎

SOL 2022 (FTX Collapse)

LSRI entered STRESS 55–60 days before the bottom.

Max Drawdown

−96%

Catastrophic collapse from cycle peak

LSRI Signal

55–60 days

Lead time before bottom

Alert Date

Nov 1, 2022

Critical regime 2 months before worst

BTC price & LSRI state overlay

These charts are meant to make LSRI easier to read visually. The BTC price line is shown with approximate historical levels, while the colored background marks the regime window LSRI identified as structural deterioration. The goal is not to claim exact trade timing, but to show when the market moved from calm to fragile before the worst part of the drawdown.

Normal Vigilance Stress Critical

Hero Proof Chart: BTC 2022 Crypto Winter

The market did not collapse in one candle. LSRI first shifted into Vigilance, then Stress, then Critical before the most painful part of the cycle fully unfolded.

This is the clearest public example of what LSRI is supposed to do: identify structural fragility early enough for a trader, allocator, or risk manager to slow down, reduce leverage, or reassess exposure before the regime damage becomes obvious to everyone.

Signal Date

Oct 26

Stress/Critical transition visible before the November washout.

Lead Time

19+ days

Enough time to move from passive exposure to active risk control.

What It Shows

Regime Shift

Not a price target, but a change from calm structure to fragile structure.

Reduce leverage

When LSRI moves into Stress or Critical, the first practical response is to shrink leverage and stop assuming the prior regime still holds.

Cut fragile exposure

Higher-beta or weaker balance-sheet assets usually suffer more once structure breaks. This is where position quality matters most.

Wait for stabilization

LSRI is a regime tool, not a bottom-calling tool. The goal is to avoid forced risk, then re-evaluate when the regime improves.

2018 Bear Market

Vigilance appeared before the final break, then Stress persisted into the late-cycle flush.

2020 COVID Crash

LSRI moved from Vigilance to Stress before the March panic low.

Backtests are re-calculated weekly based on live market microstructure entropy.

Event Timeline: How It Worked

2018

🚨 BTC Bear Market Cycle

LSRI detected regime degradation 30–56 days before the -81% drawdown bottomed.

Alert Triggered

Nov 13

Worst Lows

Dec 13-16

✓ Traders with exposure could reduce leverage and manage risk over this 30-day window.

2022

🚨 BTC/ETH & SOL Cascade

Dual alert: LSRI Stress/Critical on Oct 26 preceded major selloff by 19+ days.

BTC/ETH Alert

Oct 26

Worst Losses

Nov 8-14

✓ Early warning gave traders 19 days to reduce size before peak cascade.

2022

🚨 SOL Systemic Risk (FTX)

LSRI detected structural breakdown 55–60 days ahead of the -96% bottom.

Critical Alert

Nov 1

Bottom Reached

Dec 28-31

✓ 2 months of warning = enough time to exit 50-75% of leverage position.

Key Insights from Backtests

These backtests illustrate regime detection, not optimized trading performance.

📊

Regime > Prediction

LSRI does not predict price. It highlights when market structure has shifted from healthy to fragile so traders can adapt exposure before stress becomes obvious.

⏰

30–60 Day Lead Time

Across the major examples shown here, LSRI gave users time to react in days or weeks, not minutes. That is the value of regime monitoring versus noise-chasing.

✅

Low Noise in Backtests

In backtested periods, LSRI stayed elevated during stress and quiet in sustained bull regimes. Alerts are designed to reduce whipsaws—regime state that separates risk from safety, not intraday noise.

Backtests & Validation

Summary at a glance

🎯 The Core Metric

Quantitative Validation Snapshot

How Metrics Are Computed

Per-Asset Highlights

Major Bear Cycles

2018 Bear Market

2022 Crypto Winter

SOL 2022 (FTX Collapse)

BTC price & LSRI state overlay

Hero Proof Chart: BTC 2022 Crypto Winter

2018 Bear Market

2020 COVID Crash

Event Timeline: How It Worked

Key Insights from Backtests

Regime > Prediction

30–60 Day Lead Time

Low Noise in Backtests

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