Gas/Bitcoin Market Overview: Bearish Momentum with Oversold RSI and Key Support Tested

• Gas/Bitcoin declined 2.24% over 24 hours, closing at 2.40e-05 after forming bearish reversal patterns.
• RSI dipped into oversold territory, while volume remained muted most of the session.
• Bollinger Bands showed a contraction late in the session, suggesting potential volatility ahead.
• A key support level held at 2.37e-05, with 2.4e-05 acting as near-term resistance.
• Fibonacci 38.2% retracement aligned with resistance, hinting at potential consolidation.

The 24-hour session for Gas/Bitcoin (GASBTC) saw the pair open at 2.42e-05 on October 16, 12:00 ET, and close at 2.40e-05 on October 17, 12:00 ET. The pair traded as high as 2.43e-05 and as low as 2.37e-05. Total volume over the 24-hour window was 4,092.2, with a notional turnover of approximately $98.21 (assuming $1 = 1 unit of BTC for this context). The bearish bias was reinforced by key support holding at 2.37e-05 and a developing bearish engulfing pattern early in the session.

Structure on the 15-minute chart revealed a bearish engulfing pattern around 19:45–20:00 ET, confirming a reversal from a recent high. A key support level at 2.37e-05 held on multiple occasions, with price failing to breach below it before rebounding. A 20-period and 50-period moving average on the 15-minute chart showed a bearish crossover by the early hours of October 17, suggesting a continuation of the downtrend. The 50-period daily MA appears to be approaching a potential confluence with the 200-period MA, which may act as a dynamic level for near-term support or resistance.

MACD showed a bearish crossover in the evening hours of October 16, followed by a weak positive divergence in the early morning hours of October 17, which may indicate a potential short-term pullback. RSI entered the oversold territory during the early hours of October 17, hinting at a potential short-covering rally. Bollinger Bands showed a contraction from 1:00 AM to 5:00 AM ET, followed by a sharp expansion, suggesting increased volatility. Price closed just above the lower band, indicating potential for a bounce or a continuation lower, depending on volume and order flow.

Fibonacci retracement levels highlighted a potential area of interest at 2.4e-05, which coincided with the 38.2% retracement of the recent downswing. This level also overlaps with the 20-period moving average, suggesting it may act as a magnet for price action in the next 24–48 hours. Volume and turnover remained mostly subdued, with the exception of a brief spike between 6:45 and 8:00 AM ET, during which price dropped from 2.4e-05 to 2.36e-05. This suggests increased selling pressure at the key retracement level.

Backtest Hypothesis
To evaluate the reliability of bearish signals such as the bearish engulfing pattern and oversold RSI, a backtest could be designed using the standard Doji-Star definition—identifying candles with small real bodies following long candles—combined with RSI entering oversold territory. Each signal could trigger a short position held for one trading day. This approach could be tested on the GASBTC pair or extended to major crypto pairs like ETH/USD or BTC/USD for broader validation. Using a volume filter to confirm the strength of the reversal pattern would further refine the strategy, filtering out false signals during low-liquidity periods.