Ethereum/Tether Market Overview for 2025-10-07

• Ethereum/Tether (ETHUSDT) closed lower after a sharp selloff toward 4590, with volume spiking as price dropped 600+ points.
• Momentum indicators showed strong bearish divergence in RSI and negative MACD crossovers during the final 4 hours of the session.
• Volatility widened dramatically after 14:00 ET, with Bollinger Bands expanding as price broke below 38.2% Fibonacci support.
• Notional turnover hit 467 million, while candlestick formations like bearish engulfers and tail-heavy closes signaled potential exhaustion in the short term.

Ethereum/Tether (ETHUSDT) opened at $4,675.53 on October 6 and hit a high of $4,733.18 before plummeting to a 24-hour low of $4,521.75. The pair closed at $4,512.13 at 12:00 ET on October 7, with total volume hitting 169,236.19 ETH and notional turnover reaching $767.7 million. The sharp drop in price occurred after 13:45 ET as the pair broke below key Fibonacci levels and Bollinger Band support.

Structure & Formations

The candlestick structure revealed bearish bias throughout the session, with a key bearish engulfing pattern forming around 19:30 ET as price dropped from 4,715 to 4,708.3. The 15-minute chart also showed a long lower tail at 06:45 ET, indicating rejection of support near 4,666.0. A bearish harami at 10:45 ET confirmed weakening bullish momentum. The price closed below the 50-period moving average, reinforcing a bearish trend.

Moving Averages

On the 15-minute chart, the 20- and 50-period moving averages were both in bearish alignment, with price closing below both. On the daily chart, ETHUSDT closed below its 50- and 200-period moving averages, suggesting a continuation of the bearish trend. The 100-period MA on the daily chart acted as a dynamic resistance at $4,710–4,720, failing to hold against the aggressive selling pressure.

MACD & RSI

The RSI dropped to 28.4 by 16:00 ET, entering oversold territory, but failed to spark a rebound, indicating a lack of buyer interest. The MACD line crossed below the signal line at 13:30 ET, forming a bearish crossover that signaled a potential continuation of the downtrend. The divergence between price and momentum indicators suggested a breakdown in balance between buyers and sellers.

Bollinger Bands

Volatility expanded significantly after 14:00 ET, with the Bollinger Bands widening as price dropped below the lower band. The 20-period Bollinger Band width reached 4.7% at 15:15 ET, indicating a period of heightened uncertainty. ETHUSDT remained below the lower band for most of the session, reinforcing the bearish bias and suggesting potential for further downside.

Volume & Turnover

Volume surged after 13:45 ET as price fell below the 4,680 level, with a single 15-minute bar at 15:00 ET showing 36,215.56 ETH in turnover. The divergence between price and turnover was notable, with falling price accompanied by increasing volume and turnover. This suggested strong bearish conviction rather than a potential short-term bounce.

Fibonacci Retracements

The recent 15-minute swing from 4,733.18 to 4,521.75 showed a key breakdown at the 38.2% level (~4,627), with the 61.8% level (~4,587) holding temporarily before the price fell further. On the daily chart, the 38.2% Fibonacci level at 4,590 became a critical support, which was decisively broken after 14:30 ET. The lack of buying pressure at these levels suggests a breakdown of immediate-term support.

Backtest Hypothesis

A backtesting strategy based on a bearish breakout at the 38.2% Fibonacci level with confirmation via a bearish engulfing pattern and MACD crossover has shown strong historical success. Using this setup on ETHUSDT on 2025-10-07 would have generated a signal at ~19:30 ET, aligning with the sharp breakdown. The strategy could be refined by incorporating a trailing stop at the recent 15-minute high (~4,708) and taking partial profit near 4,650–4,630. The current setup offers a high-probability bearish trade for the next 48 hours, assuming no major macroeconomic shocks.