FORMUSDC Market Overview: 24-Hour Bearish Reversal and Potential Support Test

• Four/USDC traded lower over the last 24 hours, closing near a key support level with heavy volume clustering in the late trading session.
• A sharp bearish trend emerged after a failed bullish rebound attempt, indicated by bearish engulfing and long lower shadows.
• Volatility surged as the pair broke through key Bollinger Band levels with a large range candle at the start of the session.
• RSI entered oversold territory, but price remains pressured, suggesting possible bearish continuation unless buyers step in.
• Turnover spiked during the mid- to late-ET session, confirming the strength of the selloff and increased participation.

Four/USDC opened at 1.4399 on 2025-09-21 at 12:00 ET and closed at 1.2596 as of 2025-09-22 at 12:00 ET. The 24-hour range was 1.4508 (high) to 1.2596 (low), with a total volume of 358,935.5 and a turnover of approximately $493,679. The price action reflects a strong bearish reversal after early bullish momentum.

The structure of the 24-hour period showed a bearish reversal after an initial rally in the late evening and early morning hours. A strong bearish engulfing pattern formed after the 04:15 ET 15-minute candle, signaling a shift in sentiment from bullish to bearish. A long lower shadow in the 06:15 ET candle confirmed bearish exhaustion, while a later doji at 10:45 ET highlighted indecision. Key support levels to watch include the 1.2596 low and 1.2400 (38.2% Fibonacci from the recent high), with resistance at 1.2734 and 1.283.

Moving averages on the 15-minute chart show a clear bearish crossover: the 20-period SMA crossed below the 50-period SMA, reinforcing the downtrend. On the daily chart, the 50-period SMA is near 1.3431, with the 200-period SMA acting as a strong bearish trendline. Price is now well below all three (50, 100, 200) daily moving averages, suggesting continued bearish pressure.

Momentum indicators reinforce the bearish case. RSI dropped below 30 during the session, reaching an oversold level but failing to trigger a reversal. MACD turned negative, with the histogram showing a widening bearish divergence, indicating growing bearish momentum. Bollinger Bands showed a sharp contraction at 04:15 ET followed by a violent expansion, with price closing near the lower band, a sign of a probable continuation of the bearish move.

Volume and turnover increased significantly during the 04:15–05:30 ET period, with the largest single 15-minute volume spike at 06:15 ET (49,404.4). This aligns with the sharp breakdown to 1.3066 and suggests a key turning point in the trend. Notional turnover was highest in the 06:15 and 09:30 ET candles, confirming the strength of the bearish move. Divergences between volume and price were minimal, indicating strong alignment in the bearish move.

Fibonacci retracement levels on the 15-minute chart indicate that 1.2596 is a 61.8% retracement of the earlier bearish move. On the daily chart, the 38.2% Fibonacci level at 1.2400 may provide a near-term floor for the pair. A break below 1.2400 would target the 1.2300 psychological level, while a retest of 1.2734 could signal a potential bounce.

The coming 24 hours will likely test the 1.2596 level for durability. A sustained break below could see the pair test the 1.2400 area, while a rejection here might bring a short-term bounce. However, with RSI in oversold territory and momentum still bearish, a continuation of the decline remains the more probable scenario. Investors should remain cautious of potential volatility from macro or order-book imbalances.

Backtest Hypothesis
Given the strong bearish reversal pattern, low RSI readings, and volume confirmation, a potential backtesting strategy could involve a short entry at the close of the bearish engulfing candle (04:15 ET) with a stop just above the high of the preceding bullish candle. A target could be placed at the 1.2596 level, with a secondary stop at 1.2734 to manage risk. The 1.2400 level could then serve as a secondary target or a trailing stop level. This setup would align with the bearish momentum observed in the MACD and RSI, as well as the key Fibonacci support levels.