FORMUSDC Market Overview: Sharp Correction and Oversold Conditions

• Four/USDC declined sharply overnight, breaking key support levels and ending near 1.7032 at 12:00 ET
• Volatility surged during the overnight session, with a 1.92–1.705 range and notable volume spikes
• RSI shows oversold conditions, indicating potential for a short-term bounce or consolidation
• Bollinger Bands show price near the lower band, suggesting a potential reversal if buyers enter
• Volume and price action appear aligned, with no major divergence signaling strength in the downtrend

At 12:00 ET on 2025-09-19, the Four/USDC pair opened at 1.9047 and closed at 1.7032, after hitting a high of 1.9485 and a low of 1.6861 in the past 24 hours. Total volume was 203,666.5, and notional turnover reached $356,902. The pair experienced a sharp correction overnight, driven by heavy selling pressure and a breakdown below key support levels.

Structure & Formations

The chart reveals a strong bearish bias, with a key support level collapsing around 1.85 and price falling further to 1.705. A notable bearish engulfing pattern appeared around 1.83, confirming the breakdown. A doji formed near 1.805, suggesting temporary indecision. The pair is now testing the next major support level around 1.70–1.72, with a potential for a bounce or a continuation lower.

Moving Averages

On the 15-minute chart, the 20- and 50-period moving averages are well above current price levels, reinforcing the bearish bias. On the daily chart, the 50-, 100-, and 200-period moving averages are also above the current price, indicating the pair remains well within a strong downtrend. A retest of these moving averages could provide opportunities for short-term bounces or countertrend entries.

MACD & RSI

MACD turned negative and continues to decline, confirming the bearish momentum. RSI has fallen into oversold territory around 30–35, suggesting a potential pause in the sell-off. However, RSI remains below 50, indicating that the overall trend remains bearish. A reversal in RSI could signal a short-term bounce, but a sustained move above 50 would be needed for a trend reversal.

Bollinger Bands

The price has remained near the lower Bollinger Band for most of the session, indicating an overextended move and a potential setup for a reversal. A move above the 20-period Bollinger Band’s middle line would suggest a shift in sentiment, while a breakdown below the lower band could trigger further losses.

Volume & Turnover

Volume spiked sharply between 04:00 and 07:00 ET, coinciding with the breakdown below 1.85 and the move toward 1.705. Notional turnover increased in tandem with price declines, suggesting strong conviction in the bearish move. The most recent volume has been lighter, indicating potential exhaustion in the downside move or a consolidation phase.

Fibonacci Retracements

Applying Fibonacci to the 1.94–1.6861 swing, the pair is currently near the 61.8% retracement level. A break below 1.705 would target the 78.6% level around 1.655. On the 15-minute chart, retracement levels around 1.73–1.74 may act as immediate resistance for a potential bounce.

Backtest Hypothesis

The backtesting strategy described assumes a breakout-based approach, entering long on a break above the 20-period Bollinger Band and exiting on a close below the 20-period EMA. Alternatively, a short trade could be triggered on a close below key support levels with increasing volume. Given current conditions, the strategy would likely remain in a short position until a clear reversal forms above 1.80. A successful test of 1.72 and a close above 1.75 could provide a favorable risk/reward setup for long entries.