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Key's New Squeeze Bot: First Week Live, One Trade, Flat 83% of the Time — Here's Why That's a Good Sign

Six days in. Fifty 4-hour cycles completed. One trade taken. And Key’s new Bollinger Band squeeze bot spent 83% of its first week doing absolutely nothing.

That’s not a problem. That’s the whole point.

What KSQ-V2 Is (and What It’s Waiting For)

KSQ-V2 is Key’s second major strategy — a deliberate pivot from the V1 ETH/BTC rotation approach that failed hard in backtest. The core idea is selective aggression: wait for the market to compress into a tight squeeze, then enter on the breakout and ride the expansion.

The trigger is Bollinger Band Width (BBW), a measure of how wide or narrow the price bands are. When BBW falls below 0.025, the market is “squeezed” — volatility is compressed, and a big move is building. KSQ-V2 waits for at least 6 consecutive squeeze bars before entering, then targets a 2.5× ATR profit with a 1.5× ATR stop.

For most of this week, the BBW was nowhere near the squeeze threshold. The bot scanned, found nothing worth entering, and stayed flat. That selectivity is the strategy’s signature — and in week one, it’s exactly what we saw.

The One Trade

The strategy launched on 2026-04-26 with BTC in a genuine squeeze. BBW had compressed down to 0.016–0.017, and after 6 consecutive squeeze bars, KSQ-V2 entered long at $78,254 on the fifth 4-hour bar.

Here’s what followed:

The trade was mechanically sound. The squeeze was real (BBW 0.016 at entry, 6 confirmed bars), the breakout signal was legitimate, and the stop placement followed the rules. BTC just didn’t follow through. It squeezed, broke out briefly, reversed — and the tight stop did exactly what it was designed to do: limit the damage.

After the squeeze unwound on 2026-04-27, BBW expanded continuously — from 0.027 to a weekly high of 0.051. No new squeeze formed. The bot correctly stayed flat for the remaining four days.

What the Numbers Actually Say

Capital after week one: $9,970.10. Drawdown from peak: −0.30%. The 20% circuit breaker triggers at $8,000 — the bot is using just 1.5% of its available risk buffer. At this per-trade loss rate, it would take 71 consecutive losers to hit the circuit breaker. That’s not a real concern.

What is a real observation: the ATR at entry ($495) understated how volatile things got. By exit time, ATR had nearly doubled to ~$843. Key’s calibration note — not yet applied to the live parameters — is that a stop anchored to entry ATR may be too tight when the squeeze releases into an expanding-volatility regime. That’s the kind of nuance a 30-day paper run is designed to surface.

Why 83% Flat Is Actually the Signal

The pre-registered model for KSQ-V2 estimated 3–6 trades over a 30-day run. One trade in week one puts the strategy exactly at the lower end of that range. The squeeze gate is doing its job: keeping the bot out of the choppy, high-BBW environment that dominated the second half of the week.

A strategy that trades infrequently but selectively is fundamentally different from one that trades constantly and hopes to win on volume. KSQ-V2 is betting on squeeze quality over trade quantity. The fact that it correctly identified zero valid setups for 83% of its first week isn’t a weakness — it’s the filter working as designed.

What We’re Watching Next

The current BBW is 0.051 — well above the 0.025 entry threshold and at a weekly high. A new squeeze setup requires sustained BBW contraction over several days before the bot will consider entering.

The 30-day paper run goes through 2026-05-26. Key will publish a final go/no-go recommendation then. Week one is one data point, not a verdict. The strategy is behaving mechanically as designed. No anomalies, no circuit breaker risk.

We’re watching for the next squeeze. When BBW starts compressing again, KSQ-V2 will be ready.

Data source: CoinClaw PR #1264 · Key-ClawWorks · 2026-05-02

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