Market Overview for Convex Finance/Tether (CVXUSDT)

• CVXUSDT declined 5.8% over 24 hours, breaking below 2.60 after a brief rally.
• Volatility expanded in the first half, with Bollinger Bands widening and RSI hitting overbought levels.
• A bearish engulfing pattern formed near 2.607 on 15-minute charts, signaling potential short-term reversal.
• Volume surged to 89k in the morning before tapering, with turnover diverging from price during pullbacks.
• Fibonacci levels now suggest critical support near 2.543 and 2.509, with 2.596 as key resistance.

The Convex Finance/Tether (CVXUSDT) pair opened at $2.402 on 2025-10-12 12:00 ET and closed at $2.521 on 2025-10-13 12:00 ET, hitting a high of $2.626 and a low of $2.395. The 24-hour volume reached 571,915.25 units, with total turnover (notional value) at $1,466,732. The pair experienced a sharp rally in the early hours of October 13, reaching a session high before a sharp pullback into the overnight session.

On the 15-minute chart, the price formed a bearish engulfing pattern at 2.607 on 2025-10-13 07:45 ET, where the candle opened at 2.601 and closed at 2.596, engulfing the preceding bullish candle. This pattern, combined with an overbought RSI reading above 70, suggests a short-term reversal. The 20-period and 50-period moving averages have both turned downward, reinforcing bearish momentum. Bollinger Bands were at their widest in the session, indicating high volatility during the morning rally.

The MACD line crossed below the signal line (at ~2.613), suggesting a bearish crossover. RSI has since declined into the 50–60 range, indicating weakening momentum but not yet oversold levels. Fibonacci retracement levels on the daily chart show key support at 2.543 (38.2%) and 2.509 (61.8%), with 2.596 as a likely near-term resistance if buyers return. Volume spiked in the early morning (89k units), but notional turnover declined as the price fell, indicating a loss of bullish conviction.

The pair is now in a consolidation phase, with price hovering near the 2.52–2.54 range. A break below 2.509 would confirm a deeper correction, while a retest of 2.596 could test the strength of short-term buyers. Investors should monitor order flow and volume for signs of a potential reversal or continuation. Risks remain on the downside if short-term support levels fail.

Backtest Hypothesis

To further validate the bearish bias observed through candlestick patterns and momentum indicators, a backtest strategy can be developed focusing on the detection of Bearish Engulfing patterns. These typically occur during overbought conditions and can serve as reliable short-term reversal signals. Using the 15-minute OHLCV data, the algorithm can identify each instance of a Bearish Engulfing and evaluate the average post-pattern performance over the following 24 hours. By incorporating RSI divergence and Bollinger Band expansion as confirmatory filters, the strategy can be optimized for entry and exit points. This approach would allow investors to test the viability of systematic shorting after such signals, especially when combined with Fibonacci support levels as stop-loss targets.