Market Overview for Ethereum/Dai (ETHDAI): Deep Correction with Oversold Momentum

• ETHDAI traded lower on heavy volume, closing near session lows as bearish momentum accelerated in the final 6 hours.• RSI collapsed below 30 into oversold territory while MACD crossed bearishly, confirming a breakdown below key support at 3798.97.• Volatility expanded sharply between 18:00 and 22:00 ET as price dropped 5.4% on 5.2x average turnover, with no clear counter-trend bounce.

Ethereum/Dai (ETHDAI) opened at 3836.63 on 2025-10-22 at 12:00 ET and closed at 3880.63 at 12:00 ET-1. The pair hit a high of 3900.77 and a low of 3761.8, with total volume of 76.54 ETH and turnover of $292,249,786. A sharp bearish reversal emerged after 22:00 ET as price fell 109.87 points in 4 hours on 5.2x average volume.

Structure & Formations

Price broke below critical support at 3798.97 on a bearish engulfing pattern at 18:00 ET and tested prior lows from 3761.8 before recovering. A strong 61.8% Fibonacci retracement level at 3788.6 failed to hold, suggesting further downside risk if 3761.8 is retested. A morning reversal failed at 3800.45, highlighting the lack of immediate bullish conviction.

Moving Averages

On the 15-minute chart, ETHDAI closed below both 20 and 50-period moving averages, with the 50-period line at 3833.59 acting as a weak resistance. On the daily chart, price remains above the 50 and 100-day MAs but has diverged from the 200-day line at 3780.0, signaling mixed intermediate-term signals. The 50-day MA at 3823.59 could offer temporary support in a pullback.

MACD & RSI

Relative strength collapsed sharply, with RSI falling from 52 at 18:00 to 28 at 06:00 ET, reaching oversold levels. MACD crossed bearishly below the signal line with a negative histogram, confirming accelerating downward momentum. The pair may need to test the 3761.8 level to trigger a counter-trend bounce or re-enter overbought territory.

Bollinger Bands

Volatility expanded significantly between 18:00 and 22:00 ET as ETHDAI fell to the lower band of a widening band structure. The recent 15-minute range has expanded to 150 points, up from 50-70 points previously. Price closed near the upper half of the bands during the recovery phase, suggesting limited bearish exhaustion for now.

Volume & Turnover

Volume surged to 11.0878 ETH at 04:30 ET and 0.8001 ETH at 01:30 ET, coinciding with sharp price drops. Total turnover spiked to $15,669,287 at 04:30 ET and $11,869,536 at 01:30 ET, reflecting concentrated selling pressure. Despite the high volume, price failed to form a strong bounce above 3800.45, suggesting sellers still control the short-term narrative.

Fibonacci Retracements

Key 61.8% retracement level at 3788.6 failed to hold during the early morning rebound, reinforcing the bearish bias. On the 15-minute chart, a potential 38.2% retracement level at 3813.5 could offer a shallow bounce target if buying interest emerges. On the daily chart, the 61.8% retracement of the recent bearish leg sits at 3809.0, aligning with prior support.

Backtest Hypothesis

Given the current oversold RSI and bearish momentum, a backtest using the RSI(14) indicator could offer valuable insight into potential mean-reversion opportunities. For the Ethereum-to-DAI pair, the exact ticker symbol (e.g., ETH/DAI or ETHDAI) is critical for accurate historical data retrieval. Once confirmed, a backtest can be run to evaluate long-entry signals when RSI dips below 30 and closes within 5 trading days. This aligns with the observed price behavior today and could inform tactical positioning in oversold conditions.