Bitcoin Long Entries from RSI Bullish Divergence

Summary

This Bitcoin futures strategy looks for a short-term long entry after RSI and price form a bullish divergence. It identifies RSI pivot lows and compares them with earlier lows, requiring the RSI to make a higher low while price makes a lower low. The described settings include a 14-period RSI, a 40 threshold for the bullish condition, and a 25-candle lookback. An entry also requires the close to be below the prior divergence low and hourly RSI to be below 40. The strategy exits at a 5% loss or when RSI exceeds 75 or a bearish divergence appears.

The document supplies Pine Script and backtest settings for BTC/USDT futures on one-minute bars over a brief period in November 2023, but reports no performance results. Its prose recommends combining indicators, checking the broader trend, accounting for fees, and retuning parameters. The code’s actual entry conditions add an hourly RSI filter beyond the overview, and the divergence logic and parameter choices are not supported by reported comparative or out-of-sample evidence. The setup therefore describes a testable signal, not evidence of profitability.

Key ideas

• The strategy seeks long trades when RSI forms a higher pivot low while price forms a lower low.
• An entry also requires a low RSI reading and a close beneath the earlier divergence low.
• The script uses hourly RSI as an additional entry filter.
• It exits on a percentage loss, an elevated RSI reading, or a bearish divergence.
• The short backtest interval is provided without performance statistics.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.