How to grasp the buying point of the 60-minute Bollinger Band closing + 15-minute MACD bottom divergence?

A confirmed Bollinger Band closing on the 60-minute chart, combined with MACD bottom divergence on the 15-minute chart, offers a high-probability reversal setup for intraday or swing traders.

Jun 16, 2025 at 12:03 am

Understanding the Bollinger Band Closing Signal on a 60-Minute Chart

The Bollinger Band closing signal refers to a situation where the price closes outside the upper or lower band and then re-enters it in the subsequent candlestick. In this context, we focus on the lower Bollinger Band closing, which indicates a potential reversal from a downtrend. On the 60-minute chart, this pattern becomes particularly relevant for intraday traders or swing traders looking to capture short-to-medium-term movements.

Key characteristics of a valid Bollinger Band closing signal include:

• The price must close below the lower Bollinger Band, not just touch it.
• The next candle must close within the bands, showing rejection of the lower extreme.
• Volume should ideally increase during the breakout candle and decrease during the re-entry, indicating selling exhaustion.

This pattern suggests that sellers have temporarily pushed the price too far, creating an opportunity for buyers to step in.

Recognizing MACD Bottom Divergence on the 15-Minute Chart

Once the 60-minute chart shows a potential reversal via the Bollinger Band closing, the 15-minute chart is used to confirm momentum alignment through MACD bottom divergence. A MACD bottom divergence occurs when the price makes a new low but the MACD does not, suggesting weakening bearish momentum.

Steps to identify MACD bottom divergence:

• Plot the MACD indicator with default settings (12, 26, 9) on the 15-minute chart.
• Look for two consecutive lows in price where the second low is lower than the first.
• Simultaneously, check if the MACD histogram or line forms a higher low, indicating divergence.
• Confirm the divergence by observing a bullish crossover of the MACD line above the signal line shortly after the second low.

This divergence serves as a momentum confirmation, aligning with the structural signal from the 60-minute Bollinger Band.

Combining Both Indicators for Higher Probability Entry

To effectively combine these signals, traders must monitor both timeframes simultaneously. First, the 60-minute chart must show a confirmed Bollinger Band closing, signaling a potential reversal. Then, the 15-minute chart should exhibit a clear MACD bottom divergence, reinforcing the idea that the downward momentum is waning.

Process to align both indicators:

• After identifying the Bollinger Band closing on the 60-minute chart, switch to the 15-minute timeframe.
• Scan for recent swing lows and compare them with the MACD readings.
• If a divergence is present, wait for a bullish candlestick formation (e.g., hammer, engulfing pattern) near the support level.
• Enter the trade once the candlestick closes above the previous resistance or key moving average levels.

This multi-timeframe approach increases the probability of successful trades by combining structural and momentum signals.

Setting Stop Loss and Take Profit Levels

Risk management remains crucial even when using high-probability setups like this one. For this strategy, the stop loss should be placed below the most recent significant swing low on the 15-minute chart. This ensures that if the price continues to fall past the expected reversal zone, the trade can exit early with minimal losses.

Guidelines for setting stops and targets:

• Place the stop loss approximately 1% below the entry point or beneath the divergence low.
• Set the initial take profit at the nearest resistance level or Fibonacci extension level (e.g., 61.8%).
• Consider trailing the stop to lock in profits once the price moves favorably.

Using fixed risk-reward ratios such as 1:2 or 1:3 helps maintain consistency in trading outcomes over time.

Practical Example Using a Cryptocurrency Pair

Let’s consider a real-world scenario involving BTC/USDT on Binance. Suppose the 60-minute chart shows Bitcoin closing below the lower Bollinger Band, followed by a strong bullish candle that closes back within the bands. This suggests a possible reversal is underway.

Switching to the 15-minute chart reveals that while the price made a new low, the MACD formed a higher low, indicating divergence. A bullish engulfing pattern appears shortly afterward, confirming the shift in momentum.

In this case, a trader would enter a long position at the close of the engulfing candle. The stop loss would be placed just below the divergence low, and the take profit set at the immediate resistance level. If the price rises as anticipated, the trade can be exited manually or allowed to reach the target automatically.

---

Frequently Asked Questions (FAQs)

Q1: Can this strategy be applied to altcoins as well?

Yes, this strategy works across various cryptocurrencies, including altcoins. However, ensure sufficient liquidity and volume to avoid slippage and false signals.

Q2: What if the MACD divergence doesn’t appear after a Bollinger Band closing?

Not every Bollinger Band closing will coincide with a MACD divergence. It's best to skip the trade and wait for confluence between both indicators to increase accuracy.

Q3: Is it necessary to use exactly the 60-minute and 15-minute charts?

While these timeframes are optimal for this setup, traders can experiment with adjacent timeframes (e.g., 30-minute and 5-minute), though results may vary depending on market conditions.

Q4: How often do these signals occur in crypto markets?

These combined signals appear less frequently than single-indicator setups, but they tend to offer higher reliability. Traders should remain patient and scan multiple pairs to find valid opportunities.