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Technical Analysis9 min readMarch 5, 2026
RSI Divergence Strategy Backtest: 2024 Results
A rigorous backtesting analysis of bullish and bearish RSI divergence strategies on BTC and ETH with detailed performance metrics.
S
Sarah Kim
Strategy Developer
RSIdivergencebacktestBTCETH
Win Rate
52.6%
+52.6%
Profit Factor
1.30
Sharpe Ratio
0.98
Annual Return
+31.2%
+31.2%
Strategy Definition
We tested classic RSI(14) divergence signals on 4-hour BTC/USDT and ETH/USDT charts. A bullish divergence occurs when price makes a lower low while RSI makes a higher low. Bearish divergence is the inverse.
Backtest Parameters
| Parameter | Value |
|---|---|
| Period | Jan 2024 - Dec 2024 |
| Timeframe | 4H candles |
| RSI Period | 14 |
| Entry | Next candle open after divergence confirmation |
| Stop Loss | 2x ATR(14) from entry |
| Take Profit | 3x ATR(14) from entry (1.5 R:R) |
| Position Size | 2% risk per trade |
Results Summary
| Metric | BTC | ETH | Combined |
|---|---|---|---|
| Total Trades | 127 | 143 | 270 |
| Win Rate | 54.3% | 51.0% | 52.6% |
| Avg Win | +3.8% | +4.2% | +4.0% |
| Avg Loss | -2.1% | -2.4% | -2.25% |
| Profit Factor | 1.38 | 1.22 | 1.30 |
| Max Drawdown | -14.2% | -18.7% | -16.1% |
| Sharpe Ratio | 1.12 | 0.87 | 0.98 |
| Annual Return | +38.4% | +24.1% | +31.2% |
Key Takeaways
- Bullish divergences outperformed bearish divergences by 1.4x in profit factor
- Filtering for divergences near key support/resistance levels improved win rate by 8%
- Adding volume confirmation (divergence + declining volume) improved Sharpe by 0.3
- BTC showed more reliable signals than ETH across all metrics
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