Decred/Tether Market Overview: Sharp Selloff and Bearish Momentum

• DCR/USDT declined sharply from 20.50 to 18.06 in early overnight trading, showing bearish momentum and volatility expansion.
• A key bearish engulfing pattern formed at 19.71, confirming the breakdown from mid-20.30 support.
• Volatility and turnover spiked in the 17:15–18:00 ET window, with large volume driving price down by 18.4%.
• Bollinger Bands show price trading near the lower band, and RSI is in oversold territory at ~20.
• MACD is bearish and diverging from the price, suggesting continued downward pressure in the near term.

24-Hour Snapshot and Key Metrics

At 12:00 ET–1 on October 3, Decred/Tether (DCRUSDT) opened at 20.19 and traded as high as 20.50 before closing at 18.14 on October 4 at 12:00 ET. The asset touched a 24-hour low of 17.93. Total volume reached 61,687.37 DCR, with a turnover of 1,161,119.19 USDT. The sharp decline and high volatility mark a potential turning point in short-term sentiment.

Structure & Formations

The 15-minute chart shows a critical bearish breakdown from a key support zone around 20.30, confirmed by a large engulfing candle at 19.71. This pattern suggests strong bearish conviction following a brief consolidation phase. Additionally, multiple lower wicks in the 18:00–22:00 ET window indicate failed attempts to rally, reinforcing the bearish bias. A potential support level has emerged around 18.02–18.12, coinciding with recent consolidation.

Moving Averages and MACD

On the 15-minute chart, the price closed below both the 20-period (18.34) and 50-period (18.45) moving averages, indicating bearish momentum. The MACD line has turned negative and crossed below the signal line, with a bearish divergence forming from the late-night rally. On the daily chart, the 50-period EMA sits at 18.45, above the current price, suggesting that short-term bearish pressure remains intact.

RSI and Bollinger Bands

Relative Strength Index (RSI) has fallen into oversold territory, reaching 19.9, indicating possible short-term exhaustion in the downward move. However, without a clear reversal pattern or a sustained bounce above 18.45, this may not be enough to trigger a bounce. Bollinger Bands show a significant expansion in volatility from 17:15–18:00 ET, with price trading near the lower band at 18.02–18.14. This suggests a continuation of bearish momentum is more probable than a reversal unless a strong breakout occurs.

Fibonacci Retracements and Volume Analysis

Applying Fibonacci retracement levels to the recent 20.17–19.21 swing shows a 61.8% retracement at 19.46, which was tested and rejected. On the 15-minute chart, volume spiked at 17:15–18:00 ET, with turnover reaching 6170.151 DCR, confirming the breakdown. In contrast, the last few hours have shown moderate volume, suggesting the sell-off may be subsiding slightly. A divergence between price and volume is not yet evident, but watchful monitoring of volume spikes on potential bounces is warranted.

Forward-Looking Outlook

The next 24 hours may see DCRUSDT testing the 18.02–18.12 support area, where a bounce or rejection could signal short-term stability. A break below this zone would likely extend the decline toward the 17.70–17.90 range. Traders should watch for a potential bullish reversal pattern or a retest of 18.45 on the 50-period EMA as signs of potential reversal. Caution is advised, as the overall trend remains bearish.

Backtest Hypothesis

A potential backtesting strategy could involve a short-biased approach triggered by a bearish engulfing pattern on the 15-minute chart, confirmed by a close below the 20-period EMA and a RSI reading below 30. A stop-loss could be placed above the recent high of the engulfing candle, and a take-profit target set at the 61.8% Fibonacci retracement level. This strategy would aim to capitalize on short-term momentum while managing risk with defined entry and exit levels.