CoW Protocol/USDC Market Overview: Bearish Momentum Intensifies Amid Volume Expansion

• CoW/USDC declined 5.7% in 24 hours, with bearish momentum intensifying in the last 6 hours.
• A 15-minute engulfing pattern confirmed a sharp selloff after 23:00 ET, with price falling below key support at 0.285.
• Volatility expanded significantly between 19:15 and 23:00 ET, with over 73,000 USDC traded in key bearish candles.
• RSI entered oversold territory by 06:00 ET, while MACD remained bearish, signaling potential for further downside.
• On-chain volume spiked late ET, confirming the breakdown below 0.286 and into 0.272 support.

At 12:00 ET on 2025-10-09, CoW Protocol/USDC (COWUSDC) opened at 0.2819, reached a high of 0.2911, and closed at 0.275 after hitting a low of 0.272. Total volume was 305,968.3 USDC, with a notional turnover of approximately $82,955. The pair experienced a pronounced bearish reversal, with key support levels tested and breached overnight.

Structure & Formations

Price action over the past 24 hours formed a bearish structure, with a key 15-minute engulfing pattern appearing at 23:00 ET, confirming a breakdown below 0.286. This level had previously acted as a magnet for buyers. A significant bearish divergence occurred between 04:00 and 06:00 ET as price made lower highs while volume waned. A doji appeared at 06:15 ET, signaling indecision before a sharp drop below 0.280. The most significant move occurred between 08:30 and 09:00 ET, when COW/USDC fell from 0.2788 to 0.2729 in a single 15-minute candle, confirming the breakdown of the 0.276–0.278 range.

Moving Averages

The 20- and 50-period EMA on the 15-minute chart remained bearish, with price staying below both indicators. The 50-period line acted as a dynamic overhead resistance during the 19:00–20:30 ET rally. On the daily chart, the 50- and 200-day MA suggest continued bearish pressure, with price remaining below both and no sign of a reversal in the near term.

MACD & RSI

The MACD remained negative throughout the session, with a bearish crossover occurring at 05:45 ET. RSI dropped below 30 at 06:00 ET, entering oversold territory, though divergence between price and RSI suggested the move could continue. A bearish MACD histogram expansion occurred between 08:30 and 09:30 ET, coinciding with the breakdown of key support. While RSI may offer short-term bounce potential, bearish momentum appears to be well established.

Bollinger Bands

Bollinger Bands expanded significantly during the selloff from 08:30 to 10:00 ET, with price moving well below the lower band. Volatility contraction occurred between 01:30 and 03:30 ET, before the next leg of selling resumed. Price has remained within the lower 20% of the band for much of the session, suggesting continuation of the downtrend is probable. The 20-period BB width expanded by 35% during the session, indicating heightened short-term volatility and potential for further downside.

Volume & Turnover

Volume spiked sharply at key moments, particularly between 19:30 and 20:30 ET when over 18,000 USDC was traded as price fell below 0.288. A 15-minute candle at 08:30 ET saw 12,188 USDC traded, confirming the breakdown below 0.278. Notional turnover reached a peak of $3,528 during the 08:30–09:00 ET move. Divergence between volume and price occurred between 04:00 and 06:00 ET, as price made new lows with decreasing volume, suggesting waning conviction.

Fibonacci Retracements

The 0.285–0.2911 swing formed a key Fibonacci level at 0.286, which was breached during the selloff. Price continued to 0.2729, which aligns with the 61.8% level of the earlier 0.276–0.288 move. The 38.2% level at 0.275 appears to be acting as a near-term support, with price bouncing slightly after reaching 0.2729. If the selloff continues, the next Fibonacci level to watch is 0.270.

Backtest Hypothesis

The described backtesting strategy focuses on identifying key candlestick patterns (such as engulfing and doji) alongside RSI and MACD divergence to trigger sell signals. The 23:00 ET engulfing pattern and the 06:15 ET doji both aligned with bearish MACD divergences and RSI oversold readings, confirming the strategy’s potential to capture the selloff. Additionally, the 08:30 ET breakdown candle was accompanied by strong volume and a MACD expansion, offering another confirmation point. While the strategy requires a stop-loss above key resistance (currently at 0.285), it appears well suited to the current bearish environment.