FORMUSDC Market Overview

• Four/USDC plummeted from $1.16 to $0.46 amid extreme volatility, with a 24-hour low of $0.078.
• Momentum collapsed as RSI and MACD turned sharply negative, signaling oversold conditions.
• Volume spiked dramatically during the drop, with a notable divergence between price and turnover in the final 15 minutes.
• Bollinger Bands widened significantly during the selloff, indicating a possible exhaustion of downward momentum.
• Fibonacci levels at 61.8% may offer short-term support near $0.75, though bearish control is evident.

Four/USDC opened at $1.1568 (12:00 ET − 1) and closed at $0.755 at 12:00 ET, with a high of $1.1616 and a low of $0.0784 over the 24-hour period. The pair experienced a dramatic selloff, dropping over 60% as bearish momentum intensified. Total volume reached 4.83 million, with notional turnover surging to over $3.4 million, reflecting extreme market participation and panic selling.

The chart structure suggests a breakdown from a bullish pattern into a deep bearish trend. A key support level appears to have formed around $0.75, coinciding with the 61.8% Fibonacci retracement from the high. However, the price has yet to stabilize above this level, and the formation of long lower shadows and engulfing patterns suggests that sellers may still dominate. The 20-period and 50-period moving averages on the 15-minute chart have shifted decisively lower, reinforcing bearish bias.

MACD turned sharply negative with a strong bearish crossover, and RSI has entered the 20–30 range, indicating potential oversold conditions. However, the depth and duration of the selloff suggest that further support testing may be required before a reversal occurs. Bollinger Bands have widened significantly in response to the volatility, and the price has closed near the lower band, indicating possible exhaustion of the downtrend. A short-term bounce could occur if buyers emerge near the 38.2% retracement at $0.87, though this remains speculative.

The volume profile tells a mixed story. While the initial drop saw a massive increase in trading volume (notably at $0.9264), the final leg of the selloff saw a sharp drop in volume, suggesting a lack of conviction among sellers. Turnover also peaked early in the downturn and has since declined. This divergence between volume and price could indicate that the selloff is exhausting, especially if the price consolidates near current levels. However, until volume picks up on a rebound, bearish bias remains strong.

Backtest Hypothesis
The proposed backtest strategy focuses on identifying divergences between price and RSI during sharp selloffs. A long entry is triggered when RSI < 30 while price closes above the 20-period moving average. Stop-loss is placed at the 15-minute low of the current downtrend, and take-profit targets the 38.2% and 61.8% Fibonacci levels. Given today’s sharp decline and RSI hitting oversold levels, a buy trigger may be justified if the pair closes above $0.755 tomorrow. However, the lack of follow-through volume raises concerns about the sustainability of a rebound.