Market Overview for Tether/Colombian Peso (USDTCOP)

• Price fluctuated within a tight range, showing a 24-hour high of 3849.0 and low of 3814.0.
• Volume surged during late-night hours but declined significantly in the early morning.
• A bearish engulfing pattern emerged post-19:00 ET, signaling potential bearish momentum.
• RSI and MACD showed moderate divergence in the final hours, hinting at a potential trend reversal.
• Bollinger Bands showed mild volatility expansion after 21:00 ET, indicating increased market uncertainty.

The Tether/Colombian Peso (USDTCOP) pair opened at 3832.0 on 2025-10-05 at 12:00 ET, reached a high of 3849.0, a low of 3814.0, and closed at 3818.0 on 2025-10-06 at 12:00 ET. Total volume for the 24-hour period amounted to 266,696.0, with a notional turnover of $1,026,756,622.00.

The price action revealed a tight trading range, with key resistance levels forming around the 3835.0–3840.0 zone and support levels developing at 3825.0–3830.0. A bearish engulfing pattern appeared at 19:00 ET, as the price opened at 3834.0 and closed at 3824.0, following a higher open the previous candle. This formation may signal a short-term bearish shift. A doji near 23:45 ET (3826.0) also hinted at indecision among traders. On the 15-minute chart, the 20-period and 50-period moving averages crossed in the bearish direction, supporting the downward trend.

MACD showed a bearish crossover in the final hour, with the line dipping below the signal line, reinforcing the bearish bias. RSI remained in the neutral zone for much of the day but dipped below 50 in the final hours, indicating weakening bullish momentum. The 14-period RSI crossed into oversold territory near 3818.0, suggesting a potential reversal point. Bollinger Bands experienced a mild expansion after 21:00 ET, with price staying below the middle band. This may indicate a bearish continuation or consolidation prior to a reversal.

Volume and turnover increased notably during the night session, particularly between 20:45 and 22:45 ET, when a large-volume candle recorded a high of 3849.0. However, turnover declined sharply after 06:00 ET, coinciding with a price consolidation phase. A divergence between price and volume was observed in the early morning, as price continued to decline while volume waned, potentially signaling weakening bearish pressure. Fibonacci retracement levels for the 3849.0–3814.0 swing showed 38.2% at 3837.8 and 61.8% at 3825.0. Price tested the 61.8% level multiple times during the session, failing to break decisively below it.

Backtest Hypothesis: The backtesting strategy involves entering a short position when a bearish engulfing pattern forms below a key resistance level, confirmed by a bearish crossover in the MACD and RSI dipping below 50. A stop-loss is placed above the high of the engulfing candle, with a target set at the next Fibonacci support level (3825.0). During the 2025-10-05 19:00 ET candle, this strategy would have triggered a short signal, aligning with the observed pattern and indicators. If executed, the trade would have closed near 3818.0, achieving a partial profit. This suggests the strategy may be effective for short-term bearish setups in USDTCOP during high-volume sessions.