Liquity/Tether (LQTYUSDT) Market Overview – 2025-10-07

• Price declined from 0.78 to 0.71 amid bearish momentum and low volatility.
• Oversold RSI and contracting Bollinger Bands suggest potential reversal.
• Volume surged after the decline, confirming bearish continuation.
• No strong support levels formed yet, with price near recent Fibonacci 61.8% level.
• A breakout of 0.71 could trigger further downward movement.

Liquity/Tether (LQTYUSDT) opened at $0.753 on 2025-10-06 12:00 ET and closed at $0.71 on 2025-10-07 12:00 ET, recording a 24-hour high of $0.78 and a low of $0.71. Total volume amounted to 1,098,940.0 units, with a notional turnover of approximately $756,737. The pair experienced a bearish 15-minute candlestick pattern across the session, with a notable bearish trend from mid-day on the 6th.

The price action showed a clear breakdown below the 20- and 50-period moving averages on the 15-minute chart, confirming a bearish bias. The 200-period MA on the daily chart also remained above current price levels, reinforcing the bearish context. The MACD line crossed below the signal line, indicating a weakening of bullish momentum, while RSI dipped below 30, hinting at potential oversold conditions and a possible near-term reversal. Bollinger Bands contracted during the early part of the session before a sharp expansion occurred, aligning with increased volatility and a downward breakout.

Support levels were tested at $0.71–$0.72, where the price found limited buying pressure, while resistance remains intact near $0.74–$0.75, where previous bullish attempts stalled. A doji formed around $0.733, signaling indecision. Volume surged during the selloff, especially after the $0.72 level was breached, supporting the bearish continuation. However, a lack of significant price-volume divergence suggests that a reversal might not be imminent.

Fibonacci retracement levels highlighted key areas of interest: the 61.8% level at $0.71 was briefly tested, and a break below that could lead to further support at $0.697. The 38.2% retracement at $0.729 appears to be a near-term pivot point to watch.

Backtest Hypothesis
The backtesting strategy involves a short-biased approach triggered by a crossover of the MACD line below the signal line, a drop in RSI below 30, and a breakout below the 50-period moving average. These signals are used to enter a short position with a stop-loss placed above the nearest resistance and a target at the next Fibonacci level. During the past 24 hours, these conditions were met at around 18:00 ET, aligning with a significant price drop. A successful execution would have entered the trade at $0.755 with a stop at $0.765 and a target at $0.735, potentially yielding a 3% profit.