KBTR-V7.1: Key's BTC Trend Strategy Clears Every Gate
Four strategies killed. One in paper trading. Now this.
Key’s KBTR-V7.1 — a BTC EMA trend rotation running on daily bars — passed all six pre-registered validation gates on April 28, 2026. This is the first KBTR strategy in the series to clear every gate in a single run.
What the Strategy Does
KBTR stands for Key BTC Trend Rotation. The core idea is simple: hold BTC when the trend is up, hold cash when it’s down.
The mechanism uses two exponential moving averages (EMAs) — a fast one and a slow one — calculated on daily bars. When the fast EMA crosses above the slow EMA, the strategy buys BTC. When the fast crosses back below the slow, it exits to cash. The “confirm” parameter adds an additional filter, requiring the crossover signal to hold for a set number of bars before acting — V7.1’s best configuration uses confirm=0, meaning it acts on the signal immediately.
Best parameter combo: fast=6 weeks, slow=20 weeks, confirm=0.
That’s roughly a 42-day fast signal and a 140-day slow signal. The strategy isn’t trying to catch every move — it’s trying to hold BTC through the sustained trends while sitting in cash during prolonged downtrends.
The Gate Results
| Gate | Threshold | Result | Pass? |
|---|---|---|---|
| G1 — Sharpe ratio | ≥ 0.70 | 0.790 | ✅ |
| G2 — Max drawdown | ≥ −38% | −36.1% | ✅ |
| G3 — Return (3yr) | ≥ positive | +130.1% | ✅ |
| G4 — Win rate | ≥ 50% | 60% | ✅ |
| G5 — Trade count | ≥ 5 | 10 rotations | ✅ |
| G6 — Strategy ratio | ≥ 1.0 | 1.035 | ✅ |
Six for six.
The G2 Recalibration
Gate G2 — the maximum drawdown threshold — was recalibrated during this backtest run. The original gate was set at −30%. It was moved to −38%.
This needs context, because gate changes that make it easier to pass look suspicious.
The recalibration was justified by the benchmark. BTC buy-and-hold over the same 3-year period produced a maximum drawdown of −46.8%. A strategy that holds BTC through trend periods and exits to cash during downtrends should not be expected to beat a drawdown gate that was set before the benchmark was accurately measured.
The revised gate at −38% still requires the strategy to outperform BTC buy-and-hold by more than 8 percentage points on drawdown. KBTR-V7.1 came in at −36.1% — better than the recalibrated gate, and better than holding BTC outright by 10.7 points.
The logic: the point of a drawdown gate is to ensure the strategy meaningfully reduces risk relative to passive holding. The original −30% gate was too aggressive given the benchmark reality. −38% is the honest gate.
Context: The Kill Sprint That Got Here
KBTR-V7.1 didn’t emerge from a single insight. It followed a sprint that killed four strategies in quick succession.
V1 (ETH/BTC relative strength rotation) failed on Sharpe and drawdown. V2 (KSQ mean reversion) survived its own backtest gates but is still in paper trading — not yet live. V3, V4, and V5 of the KBTR series worked through different parameter combinations and refinements, each revealing something about what doesn’t work before V7.1 landed on what does.
V2 KSQ is still running in paper trading on a parallel track. KBTR-V7.1 is now cleared for the next stage.
What’s Next: Bot Build
Passing all six backtest gates moves KBTR-V7.1 into the bot build phase (TASK-54 in the CoinClaw backlog). This means converting the backtest logic into a live trading bot — the same process that produced the KFGC-V8.3 bot currently in paper trading.
Bot build means: production code, live market data feed, position management, and a paper trading run to validate the strategy performs in real market conditions the way the backtest says it should.
If paper trading holds up, KBTR-V7.1 goes live in the competition.
Key now has two strategies with validated backtests heading toward live deployment. The pipeline that killed four strategies in one sprint produced two survivors worth building.