ETH/BTC Ratio 4H Bollinger Band Mean-Reversion Long-ETH Short-BTC Pair (BINANCE USD-M, 3-Parameter, Dollar-Neutral, Time-Stop-Only)

A DOLLAR-NEUTRAL CROSS-ASSET PAIR mean-reversion strategy on 4-HOUR bars: when the ETH/BTC price ratio reaches an extreme NEGATIVE z-score (ETH oversold relative to BTC over the lookback window), simultaneously LONG ETHUSDT.BINANCE and SHORT BTCUSDT.BINANCE in EQUAL DOLLAR NOTIONAL. Exit when ratio mean-reverts to its rolling mean OR after a hard time stop. This is the FACTORY-PRESCRIBED PAIR MR PATTERN per the analyst feedback on the LINK/ETH 1H failure: 'DEPRECATION OF 1H CROSS-ASSET PAIR MR — Move pair MR research back to 4H where the existing ETH/BTC, BNB/ETH, SOL/ETH variants have shown consistent results.' STRATEGIC RATIONALE: (1) PORTFOLIO QUOTA FILL — long_short is at 12.6% vs heavy ≤55% long_only push (currently 87.4%). This is a true DOLLAR-NEUTRAL pair (long ETH leg notional equals short BTC leg notional), adding meaningful long_short exposure. Pairs scope is at 16.3% which is healthy but this fills the specific 4H pair-MR sub-bucket that the factory has documented as proven. (2) MECHANISM PROVENANCE — ETH/BTC ratio mean reversion at 4H has decades of supporting literature (cointegration, error-correction model, pairs trading by Gatev/Goetzmann/Rouwenhorst 2006). ETH/BTC specifically has the strongest cointegration relationship in crypto due to (a) shared use case as 'major', (b) shared macro flow drivers, (c) ETH/BTC dominance rotation patterns. The 4H timeframe is fast enough to capture MR cycles before the structural relationship drifts. (3) FEE-MATH EXPLICITLY VIABLE — 4 legs per round trip × ~0.05% taker fee per leg on Binance USD-M = ~0.20% RT total. Typical ETH/BTC MR move from z=-2.0 to z=0: ~3-5% on the ratio. At 30% position notional per leg: expected gross return per trade ≈ 0.9-1.5%. Net of fees: 0.70-1.30% per trade, comfortably above 0.20% fee floor. SHOWN EXPLICITLY: entry_z(-2.0) × position(0.30) × ratio_amplitude(0.04 typical) = gross 1.2%; minus 0.20% RT fees = net 1.0% per trade. (4) STRUCTURAL AVOIDANCE OF LINK/ETH FAILURE MODE: the LINK/ETH 1H failure was caused by (a) 1H timeframe noise, (b) optimizer-discovered parameters that destroyed full-period EV, (c) stop_z parameter that the optimizer pushed to extreme values nullifying risk controls. This hypothesis fixes ALL THREE: (a) 4H bars per analyst recommendation, (b) ONLY 3 hypothesis-declared tunable parameters with strict scope discipline, (c) NO STOP_Z tunable parameter — risk is bounded ONLY by a hard time exit (max_hold_bars=96 ≈ 16 days). The optimizer cannot push the stop to extreme values because there is no stop parameter to push. (5) AVOIDS ALL OTHER RECENT FAILURE PATTERNS: NOT funding-rate based (BTC Persistent Negative Funding, BTC Cross-Venue Funding, BTC CM Funding all failed); NOT premium_index basis MR (XRP premium failed catastrophically); NOT Donchian-with-trend (regime decay across BTC/XRP/AVAX); NOT volatility-compression breakout (deprecated); NOT skewness (mechanism class refuted); NOT OI-surge (regime dependent); NOT liquidations (data backfill gap); NOT BNB (moratorium); NOT AVAX (multiple failures); NOT cross-venue (fee-math complexity).