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ETH 4H RSI(2) Extreme-Overbought Momentum-Continuation Long with Daily Bull Regime Filter

A long-only single-instrument MOMENTUM-CONTINUATION strategy on ETHUSDT perpetual futures using 4-hour bars and OHLCV-only data, with a daily-bar bull regime filter. This proposal is the EMPIRICALLY-CORRECTED INVERSION…

Hypothesis

A long-only single-instrument MOMENTUM-CONTINUATION strategy on ETHUSDT perpetual futures using 4-hour bars and OHLCV-only data, with a daily-bar bull regime filter. This proposal is the EMPIRICALLY-CORRECTED INVERSION of the failed EthFourHourRsi2OversoldMeanRevLong strategy. The analyst's failure analysis of that strategy revealed a critical asymmetry: **RSI(2) mean-reversion is BTC-specific**. On BTC, oversold conditions revert because institutional flows and ETF rebalancing absorb supply at extremes (PF 1.29,……Show moreShow less

A long-only single-instrument MOMENTUM-CONTINUATION strategy on ETHUSDT perpetual futures using 4-hour bars and OHLCV-only data, with a daily-bar bull regime filter. This proposal is the EMPIRICALLY-CORRECTED INVERSION of the failed EthFourHourRsi2OversoldMeanRevLong strategy. The analyst's failure analysis of that strategy revealed a critical asymmetry: **RSI(2) mean-reversion is BTC-specific**. On BTC, oversold conditions revert because institutional flows and ETF rebalancing absorb supply at extremes (PF 1.29, Sharpe +1.41). On ETH, the same RSI(2) oversold conditions produce CONTINUATION because: (a) leverage-driven liquidation cascades create runaway selling rather than absorption, (b) staking validators EXIT when ETH drops below cost basis (rather than entering as the BTC institutional buyers do), (c) ETH has higher derivative open interest concentration that amplifies one-way moves. This proposal applies the SYMMETRIC CORRECTION: if ETH oversold = downward continuation, then ETH overbought IN A BULL REGIME = upward continuation. The leverage and staking dynamics that produce runaway selling on oversold ETH should produce runaway buying on overbought ETH in confirmed uptrends: (a) leveraged long entries cascade as RSI(2) extremes attract momentum traders, (b) staking validators ADD to positions during uptrends (rewards-rebalancing flows), (c) ETF inflows accelerate during ETH-cycle momentum phases. The mechanism: 4H RSI(2) >= 95 (extreme overbought — top ~2-3% of historical readings) in bull regime triggers a long entry expecting CONTINUATION over the next 4-12 hours. This is mechanistically distinct from EthDailyGoldenCrossMomentumLong (which fires on RARE 50/200 EMA cross regime-change events ~once per year) and from EthBtcRatioDailyEmaTrendLongEth (which captures slow cross-asset rotation). RSI(2) overbought continuation fires ~30-50× per year, providing intra-trend momentum capture that the regime-change strategies miss. This passes ALL failure-pattern filters: (1) ETH is top-2 (not mid-cap altcoin), (2) 4H is high-frequency (not daily-rare), (3) momentum-continuation (not trend-following with tail dependence), (4) linear futures (framework supported), (5) explicit articulation of WHY this mechanism produces SAME-DIRECTION signal on ETH (the analyst's required justification for cross-asset proposals).

Backtest and paper results are hypothetical. Trading involves risk of loss.