CoW Protocol/USDC Market Overview

• Price declined sharply from 0.3682 to 0.3520, ending near the session low.
• Momentum weakened with RSI below 30, suggesting oversold conditions.
• Volume spiked during the selloff but faded as price stabilized.
• A bearish engulfing pattern formed near 0.3660, reinforcing downward bias.
• Volatility expanded as price broke out of a Bollinger Band consolidation.

At 12:00 ET on 2025-09-14, CoW Protocol/USDC (COWUSDC) opened at 0.3678, reached a high of 0.3711, and fell to a low of 0.3469, closing at 0.3485. Total volume was 167,414.8, and notional turnover was $59,746.8 (based on USDC volume-weighted prices).

Structure & Formations

Price action unfolded in a bearish sequence, with a sharp breakdown from the 0.3660–0.3680 range triggering a rapid descent. A bearish engulfing pattern formed after a short rebound near 0.3660, confirming a reversal. A long lower shadow at 0.3520 and a closing near the session low suggest exhaustion in the short term. Key support is forming around 0.3469, while resistance lies at 0.3520.

Moving Averages

On the 15-minute chart, price closed well below the 20SMA (0.3573) and 50SMA (0.3590), reinforcing a short-term bearish trend. The 200EMA (not fully visible in data) would likely sit above 0.3610, reinforcing the downward bias. A retest of the 50SMA may act as a pivot for a potential short-covering bounce.

MACD & RSI

RSI dropped into oversold territory (28–30) after the selloff, suggesting a potential short-term bounce. MACD turned negative sharply after 19:00 ET and continued below the signal line, with bearish divergence apparent. However, a divergence between RSI and price may hint at a near-term bottoming process.

Bollinger Bands

Price broke below the lower Bollinger Band at 0.3520, confirming a breakout to the downside. This expansion in volatility followed a period of consolidation and suggests increased momentum in the short leg. The bands are now stretched, and a retest of the 0.3469 low could trigger a rebound within the bands or continue the bearish bias.

Volume & Turnover

Volume spiked during the 19:00–20:00 ET sell-off and again during the 14:45 ET breakdown, aligning with price action. Notional turnover also increased during these periods, confirming the strength of the move. However, volume has since declined as price stabilized near 0.3485, suggesting reduced conviction in further downside.

Fibonacci Retracements

The 61.8% retracement level of the recent 0.3660–0.3469 swing is at 0.3530, which may act as a potential support pivot. A rebound above this level could target the 38.2% retracement at 0.3565. On the daily chart, a key Fib level at 0.3610 may cap near-term bearish movement.

Backtest Hypothesis

The backtest strategy leverages RSI oversold levels (< 30) and a bearish engulfing pattern as entry signals for a short trade, with a stop-loss placed above the recent swing high. Based on today's action, a short entry could have been triggered at 0.3660 after the formation of the bearish engulfing candle. The stop-loss would sit above 0.3678, with a target at 0.3520. Given the current RSI and price proximity to key support, this setup could offer a favorable risk-reward ratio for short-term traders, particularly if the oversold condition leads to a bearish continuation.