Chapter 3 CloudCraft proprietary tool
What is Phantom Lights®?
Extreme crowding alerts
What is Phantom Lights®?
Phantom Lights® is Cloud Craft's proprietary alert system. It triggers when extreme crowding is detected in the market and draws attention to potential turning points. It triggers rarely: therefore when it appears, reviewing current positions and risk management is recommended.
Why does Phantom Lights® matter?
- Phantom Lights alerts trigger rarely: therefore when they appear, reviewing current positions is recommended
- The alert indicates the market has become excessively crowded in one direction and the reversal risk has increased
- DIP-ZONE: Alerts triggered when price is at low levels may indicate the sell side is beginning to exhaust
- ATH-ZONE: Alerts triggered when price is at high levels may indicate the buy side has become excessively crowded
- Important: Past performance does not guarantee future results. Each alert should be evaluated together with other data
- The alert indicates the market has become excessively crowded in one direction and the reversal risk has increased
- DIP-ZONE: Alerts triggered when price is at low levels may indicate the sell side is beginning to exhaust
- ATH-ZONE: Alerts triggered when price is at high levels may indicate the buy side has become excessively crowded
- Important: Past performance does not guarantee future results. Each alert should be evaluated together with other data
How does Phantom Lights® appear in the CloudCraft terminal?
Phantom Lights are placed on the chart as special markers. Each signal includes its date and severity level. Archive data can be viewed retrospectively: allowing you to examine the impact of past signals on price action.
How to use Phantom Lights®?
Phantom at ATH: A phantom lit near ATH is a top alert. Be cautious with long positions, tighten risk management.
Phantom at Dip: A phantom lit when price is significantly below ATH is a strong bottom alert. Historically, price has risen with low drawdown after these alerts.
Intermediate Phantom: A phantom lit between the two zones signals that the current uptrend will continue. It carries the message "the bottom is in, trend continues."
Cluster Warning: If phantoms light in rapid succession, the market is in an exhaustion phase. Each new phantom confirms weakening momentum in the current direction.
Phantom at Dip: A phantom lit when price is significantly below ATH is a strong bottom alert. Historically, price has risen with low drawdown after these alerts.
Intermediate Phantom: A phantom lit between the two zones signals that the current uptrend will continue. It carries the message "the bottom is in, trend continues."
Cluster Warning: If phantoms light in rapid succession, the market is in an exhaustion phase. Each new phantom confirms weakening momentum in the current direction.
Key points
Phantom Lights is not a timing signal. After the alert triggers, price may still continue in the current direction for a while. This alert means "be careful, something is brewing here," not "open a trade right now." It must always be evaluated together with other indicators.
Pro tip
Phantom Lights alert + Crowding level reaching EXTREME + dense liquidation area on Liquidation Heatmap = triple confluence. The simultaneous triggering of these three indicators is a situation requiring attention. Isolated alerts after prolonged silence may deserve more attention than cluster alerts.
Alert Zones
Phantom Lights alerts are divided into three different zones based on price distance from ATH (All-Time High). Each zone has a different meaning and expected market behavior:
Zone | Condition | Meaning
DIP-ZONE | Price is significantly below ATH | Dip zone alert: extreme crowding detected while price is at low levels
ATH-ZONE | Price is near ATH | Top zone alert: extreme crowding at high levels, correction risk increases
ARA-ZONE | Price is between ATH and DIP | Middle zone alert: crowding continues in the current trend direction
Zone | Condition | Meaning
DIP-ZONE | Price is significantly below ATH | Dip zone alert: extreme crowding detected while price is at low levels
ATH-ZONE | Price is near ATH | Top zone alert: extreme crowding at high levels, correction risk increases
ARA-ZONE | Price is between ATH and DIP | Middle zone alert: crowding continues in the current trend direction
Cluster vs Isolated Alerts
Alert frequency is also an important indicator:
- Isolated alert (after long silence): A stronger and more reliable indicator. A phantom that lights after a long quiet period signals a significant turning point
- Cluster alerts (rapid succession): Indicates the market is in an exhaustion phase. Consecutive phantoms in the ATH-ZONE particularly confirm weakening upward momentum
- Isolated alert (after long silence): A stronger and more reliable indicator. A phantom that lights after a long quiet period signals a significant turning point
- Cluster alerts (rapid succession): Indicates the market is in an exhaustion phase. Consecutive phantoms in the ATH-ZONE particularly confirm weakening upward momentum
The internal calculation methods of CloudCraft proprietary tools are trade secrets and are not disclosed here; this page explains what the tool measures and how it is used. This content is for education and analysis only, not investment advice. Market tools offer probability and context, not certainty; the decision is the user responsibility.