Market Overview: Liquity/Tether (LQTYUSDT) — Sharp 24-Hour Decline Amid High Volatility

• Price declined sharply from 0.696 to 0.521, forming a bearish trend with key support at 0.515–0.519.
• Volatility expanded after a consolidation period, with intraday swings exceeding 13%.
• RSI dropped into oversold territory, suggesting potential for a near-term bounce.
• MACD turned negative, confirming bearish momentum with a large bearish histogram.
• Turnover surged during the collapse, aligning with price action and validating bearish conviction.

Liquity/Tether (LQTYUSDT) opened at 0.691 on 2025-10-10 12:00 ET and closed at 0.521 on 2025-10-11 12:00 ET, with a 24-hour high of 0.696 and a low of 0.15. Total volume amounted to 11.56 million, while turnover reached $5.98 million. The pair exhibited a sharp downward move, especially between 19:00 and 21:00 ET, followed by a brief consolidation phase and marginal recovery.

Structure & Formations

Price action formed a bearish breakdown from the key resistance level of 0.68–0.69, followed by a steep descent to 0.315, breaching prior support levels. A long bearish candle with a 0.696 high and 0.315 close (2025-10-10 21:30 ET) marked a critical breakdown. A sequence of bearish engulfing patterns followed, with only a few small bullish reversals failing to regain control above 0.55. A doji candle at 0.477–0.477 (2025-10-11 00:00 ET) suggests a momentary pause in the downtrend, but failed to spark a reversal. A potential support cluster has emerged between 0.515 and 0.519, forming a short-term floor.

Moving Averages

The 15-minute chart shows the 20 EMA falling below the 50 EMA, confirming a bearish bias. On the daily chart, price is well below the 50, 100, and 200 EMAs, indicating a strong bearish setup. The MA convergence at the lower end of the price range suggests that short-term momentum remains on the downside, and any pullback is likely to be met with bearish retesting.

MACD & RSI

The MACD turned decisively negative, with a large bearish histogram and a crossover below the signal line confirming the bearish shift. RSI dropped into oversold territory (below 30) after the 21:30 ET breakdown, indicating potential for a near-term bounce. However, as RSI failed to break back above 40 and the MACD remains negative, any bounce is likely to be short-lived. The pair may need to close above 0.545 to re-enter balanced territory, but given the depth of the selloff, this may not be immediate.

Bollinger Bands

Volatility expanded significantly during the selloff, with the bands widening from a narrow consolidation phase. Price has been trading near the lower band since hitting 0.315, with the band width at its widest point in the 24-hour period. This indicates high volatility and suggests that the market is reacting to external factors, potentially triggered by macroeconomic or sector-specific news. The current positioning near the lower band, combined with an RSI reading near oversold levels, could indicate a potential bounce, but caution is needed as volatility may continue.

Volume & Turnover

Volume and turnover surged during the sharp sell-off, particularly between 19:00 and 21:30 ET, where volume exceeded 1.2 million. The large volume during this period aligns with the price action, confirming the bearish move. However, the volume during the subsequent consolidation and minor rebounds remained relatively low, suggesting limited buying interest. A divergence between the sharp price decline and low-volume bounce attempts may indicate that the bearish phase is not yet over. Traders should monitor for a volume increase on any potential reversal attempt.

Fibonacci Retracements

Applying Fibonacci retracements to the recent 0.696 to 0.315 swing, key levels include 38.2% at 0.549 and 61.8% at 0.479. Price briefly tested the 61.8% level before bouncing, indicating a potential near-term support area. On the daily chart, the 38.2% retracement of the recent downtrend from 0.7 to 0.45 is at 0.59, which may offer resistance if the pair rallies in the short term. Traders may watch these levels for potential bounce or breakdown signals.

Backtest Hypothesis

Given the current bearish momentum and the key Fibonacci support levels identified at 0.515–0.519, a potential backtesting strategy could involve a short entry just below 0.521 with a stop-loss above 0.549 (38.2% retracement level) and a target at 0.479 (61.8% retracement level). The MACD and RSI indicators suggest that bearish momentum remains intact, with RSI hovering near oversold levels. A volume-based confirmation on any short covering attempt would add robustness to the strategy. This approach would align with the observed bearish bias, while managing risk by avoiding deep short positions without clear confirmation.