Wormhole/Tether (WUSDT) Market Overview: Volatile Drop and Oversold Conditions

• Price declined sharply post 16:00 ET, hitting a 24-hour low of 0.0966 before stabilizing above 0.075.
• Momentum weakened as RSI dropped below 30, suggesting oversold conditions and potential near-term reversal.
• Volatility spiked overnight due to a large 15-minute range (0.0205) at 21:15 ET, followed by consolidation.
• Notional turnover surged to $16.86M at 21:15 ET, but price failed to follow through, indicating bearish divergence.
• A bullish engulfing pattern formed at 23:45 ET, signaling short-term buying interest but lacking follow-through.

The Wormhole/Tether (WUSDT) pair opened at 0.1013 on 2025-10-10 at 12:00 ET and reached a high of 0.1031 before plummeting to a low of 0.0966 by 19:30 ET. The price closed at 0.0791 at 12:00 ET on 2025-10-11. Total volume was 118,309,983.3, with notional turnover reaching $93,468,493. This indicates heightened trading activity amid a significant drawdown.

Structure & Formations suggest multiple key levels. A strong support appears at 0.075–0.076, where price found temporary stability. Resistance levels are forming around 0.080 and 0.082. Notable patterns include a bullish engulfing candle at 23:45 ET and a long bearish shadow at 21:15 ET. A doji appeared at 09:45 ET, indicating indecision, followed by a bearish continuation pattern at 10:15 ET. These signals may imply short-term volatility and a potential rebound off the 0.075 level.

The 15-minute chart shows the 20-period and 50-period moving averages in a bearish alignment, with the 50SMA below the 20SMA. On the daily chart, the 200DMA appears to act as a strong resistance, while the 50DMA is trending downward, suggesting a continuation of the bearish trend. Price has spent most of the session below both averages, reinforcing bearish bias. The 20SMA crossed below the 50SMA at around 19:00 ET, forming a death cross in the shorter-term.

MACD remains in negative territory, with the histogram expanding during the sharp decline, indicating strengthening bearish momentum. The RSI has dipped below 30, suggesting oversold conditions, but without a clear reversal in price, this may not yet confirm a bounce. Bollinger Bands have widened significantly during the 21:15 ET candle, reflecting high volatility. Price is currently sitting near the lower band, which may provide temporary support. If it holds, it could trigger a short-term rebound.

Volume and turnover data show strong divergence. The highest volume candle occurred at 21:15 ET, yet the price collapsed further post that session, indicating bearish confirmation. Turnover spiked to $16.86M during the same candle, while volume remained in line with broader averages. This suggests a lack of follow-through buying, reinforcing bearish sentiment. Divergence at 21:15 ET and 06:30 ET is notable, with high volume and low price impact.

Fibonacci retracement levels from the major high of 0.1031 to the low of 0.0966 show key retracement levels at 0.1007 (38.2%), 0.0993 (50%), and 0.0979 (61.8%). Price is currently near the 61.8% level at 0.0979, with a potential test of the 78.6% retracement at 0.0962. On the daily swing from 0.1028 to 0.0966, the 38.2% level aligns with 0.0993, and the 61.8% is near 0.0970—both are now acting as potential support zones. A break below 0.0966 could target the 78.6% at 0.0942, which may serve as the next key level.

Backtest Hypothesis: The proposed strategy involves a short-term mean-reversion trade triggered when RSI falls below 30 and a bullish engulfing pattern forms on the 15-minute chart, with stop-loss placed below the 61.8% Fibonacci level. Given the current positioning near oversold territory and a recent bullish candle, the strategy may find a viable entry point near 0.077. If the 0.075 level holds, a 3–5% short-term rebound could be expected. However, a break below 0.075 would invalidate the setup and suggest a continuation of the bearish trend. This approach aligns with the observed technical conditions and leverages momentum divergence and reversal patterns.