Crypto Bottom Hunting with MACD Divergence and RSI Filters

Summary

This short-term crypto strategy looks for long entries during declines using MACD divergence and oversold or weak-price conditions. One entry path requires a fresh price low while MACD stays above its recent low, RSI below 31.1, and recent highs below a 99-period EMA. Another path looks for a large bearish candle below the EMA and Bollinger middle band. The source also specifies a 10% take-profit and a 2% stop-loss from the recorded entry price.

The document lists default MACD, RSI, and Bollinger parameters and published backtest settings for BTC/USDT futures, spanning January 2023 to February 2024. It gives no performance results, so it does not establish profitability. There are also inconsistencies between the prose and implementation: the prose describes a Bollinger lower-band condition, while the code uses the middle band in its alternate entry rule. The claimed link between MACD divergence and weakening volume is not supported by a volume calculation in the shown logic. Further testing and careful review of the rules would be needed.

Key ideas

• The strategy combines MACD divergence with an oversold RSI reading to seek long entries during declines.
• A separate entry condition checks for a large bearish candle below the EMA and Bollinger middle band.
• The code sets a 10% profit target and a 2% stop relative to the stored entry price.
• Published BTC/USDT futures backtest settings are provided, but no results are reported.
• The written description and code differ on the Bollinger condition, so the implementation should be checked.

Tags

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