Tutorial/USDC Market Overview: Volatility and Volume Divergence in 24 Hours

• Price traded in a tight range overnight before a late surge to 0.03249.
• Strong volume expansion at 01:30 ET signals institutional involvement.
• Downturn began at 05:15 ET with a 10.2% drop to 0.02632.
• RSI shows oversold territory during the bearish leg, suggesting potential rebound.
• Bollinger Bands show volatility expansion as price diverges from the 20-period mean.

At 12:00 ET-1 on 2025-10-14, the TUTUSDC pair opened at 0.03004 and traded as high as 0.03289 before closing at 0.02746 at 12:00 ET on 2025-10-14. The 24-hour price range extended from 0.02632 to 0.03289. Total volume amounted to 43,562,205.0 with a notional turnover of approximately 1,116.40 (calculated as the sum of price × volume). Price action appears to have formed a broadening pattern, suggesting potential for either a continuation or reversal.

The 20-period and 50-period moving averages on the 15-minute chart suggest a mixed momentum environment. The 20-period MA crossed above the 50-period MA in the late morning, suggesting a short-term bullish bias. However, the 50-period MA appears to act as a key resistance level in the afternoon session. A key level of support may have formed near 0.0273, where price showed resilience during the bearish phase. A bearish engulfing pattern appeared around 01:30 ET, which coincided with a sharp decline and could indicate a shift in sentiment.

On the MACD, a bearish crossover occurred during the morning session, aligning with the drop in price and confirming a shift in momentum. RSI dipped into oversold territory below 25 for a period but failed to trigger a strong rebound, suggesting weak conviction in a reversal. Bollinger Bands widened significantly as price moved beyond the upper and lower bands during the 1–2 hour window, signaling heightened volatility. Price retested the lower band during the afternoon but found partial support, hinting at possible exhaustion in the bearish move.

Volume spiked dramatically at 01:30 ET (1.84M), suggesting a large block of bearish orders entered the market. However, the price decline did not match the magnitude of the volume spike, pointing to potential order flow divergence. Turnover also showed uneven distribution, with sharp spikes during the morning and late afternoon but relatively flat volume during midday. This suggests a lack of consistent directional momentum. A potential divergence between price and volume appears in the late afternoon when price declined but volume remained muted, raising questions about the strength of the bearish move.

Fibonacci retracement levels applied to the overnight rally and the subsequent bearish leg reveal key levels to watch. The 61.8% retracement level at 0.0292 could offer support, while the 38.2% level at 0.0312 may act as resistance. These levels could provide insight into whether the bearish phase is nearing its end or if further downward momentum is expected. In the next 24 hours, a break above 0.0312 could signal renewed bullish momentum, but a break below 0.0292 may indicate a deeper correction.

The backtest hypothesis involves using candlestick patterns—specifically the Bearish Engulfing pattern—as a signal for a trade. The strategy involves opening a short position at the next day’s open after a pattern is identified and closing it at the next day’s close. This approach assumes that a bearish engulfing pattern indicates a shift in momentum from bullish to bearish. To proceed with the backtest, I need to confirm whether you want to apply this strategy to a specific stock (e.g., AAPL), a basket of stocks, or an index such as SPY. Once the ticker(s) are provided, I can fetch historical data, identify the pattern dates, and calculate the returns from 2022-01-01 to 2025-10-14.