Four/USDC Market Overview: Sharp 24-Hour Decline Amid Technical Divergence

• Price dropped 16.7% in 24 hours, forming a bearish reversal pattern at key resistance
• Volatility spiked as price moved between 1.2719 and 1.0942 amid heavy turnover
• RSI and MACD signaled weakening momentum with bearish divergence
• Bollinger Bands show price near lower band, suggesting oversold conditions
• High volume in early session confirmed bearish break below 1.2047

The FORMUSDC pair opened at 1.2089 on 2025-10-03 at 12:00 ET, reached a high of 1.2719, and closed at 1.1064 as of 2025-10-04 at 12:00 ET. Price action reflected significant bearish pressure, with total volume trading at ~288,712 contracts and notional turnover reaching ~$289,500. The move below key support at 1.2047 appears to have confirmed a breakdown in structure.

Structure & Formations

Price declined in a series of bearish trends throughout the day, breaking below a critical support level at 1.2047. A large bearish engulfing pattern emerged following the 1.2047 break, confirming further weakness. A potential short-term support level appears to have formed near 1.1424–1.1628, which could see a bounce or consolidation before any further bearish move.

Moving Averages

On the 15-minute chart, the price closed below both the 20-EMA (1.18–1.19) and 50-EMA (1.20–1.22), reinforcing the bearish bias. On the daily chart, the 50-SMA and 200-SMA are likely to have acted as dynamic resistances, with the 100-SMA offering minimal support around 1.20–1.21. The price remains well below all major moving averages, indicating a strong bearish trend.

MACD & RSI

The MACD crossed into negative territory, and the histogram has widened in the short term, suggesting increasing bearish momentum. RSI dipped into oversold territory (below 30) late in the session, indicating the market may be nearing exhaustion, though a rebound could still be followed by a retest of key support levels. A failure to hold RSI above 30 would likely extend the bearish move.

Bollinger Bands

Volatility expanded significantly after the breakdown, with price reaching the lower band of the Bollinger Band late in the session. The narrow consolidation earlier in the day suggested a potential breakout or breakdown scenario, which has now been realized. The price currently sits near the lower band, reinforcing the bearish sentiment and indicating that further downside could be limited if the lower band stabilizes.

Volume & Turnover

Volume spiked in early to mid-session, confirming the breakdown from 1.2047 and the bearish move toward 1.1424. Turnover was elevated during the key declines, particularly in the 1.20–1.16 range, indicating institutional selling. However, volume in the final hours of the session has moderated, suggesting exhaustion or a possible pause in the downtrend. A divergence between price and volume in the final 15-minute candles may hint at near-term consolidation.

Fibonacci Retracements

On the 15-minute chart, price found support near the 61.8% retracement level of the 1.2047–1.2719 move at 1.198. On the daily chart, the 38.2% and 61.8% retracement levels of the key daily move from 1.2719 to 1.0942 fall near 1.196 and 1.146, respectively. These levels could be potential zones for a bounce, though bearish momentum is strong and may override these retracement levels.

Backtest Hypothesis

Given the bearish divergence in both RSI and MACD, a potential backtesting strategy could focus on short entries following a breakdown below key support levels (1.2047, 1.1628) with stop-loss placed above the nearest resistance. A trailing stop could be applied as price tests the lower Bollinger Band or Fibonacci retracements. Given the high volume during the breakdown, confirming entries with a price close below the 50-EMA could improve entry reliability. This setup may be best suited for short-term trading strategies with a target of 1.14–1.09 and a time horizon of 1–3 days.