Liquity/Tether Market Overview – 2025-10-03

• Liquity/Tether (LQTYUSDT) traded in a 24-hour range of 0.737–0.779, closing near 0.742 after a volatile sell-off post-overnight highs.
• Price action suggests weakening momentum as RSI entered oversold territory, while volume surged during the selloff.
• A notable 15-minute bearish engulfing pattern formed at 0.758, coinciding with a 4% drop in price and high-volume bearish confirmation.
• Volatility expanded significantly during the morning ET hours, as indicated by widening Bollinger Bands and divergent price-turnover flows.
• Fibonacci retracements show 0.737 as a critical 61.8% level for potential support, while resistance at 0.762 may test near-term sentiment.

Liquity/Tether (LQTYUSDT) opened at 0.756 on 2025-10-02 12:00 ET and reached a high of 0.779 before falling to a 24-hour low of 0.737, closing near 0.742 at 12:00 ET on 2025-10-03. Total volume for the period was 1,648,557.9, with notional turnover of $1,246,498. The price action reflects a sharp bearish reversal from mid-day highs, driven by increased bearish momentum and a divergence in volume and price.

Structure & Formations

The 15-minute chart reveals multiple bearish formations. A strong bearish engulfing candle at 0.758 on 193000 ET marked a turning point in sentiment, with open at 0.758 and a close at 0.779. A key support level appears to be forming near 0.737–0.740, with multiple bounces and a potential 61.8% Fibonacci retracement level aligning there. Notable bullish reversal signs have been limited, though a doji at 0.744 on 114500 ET hints at indecision.

Moving Averages

The 20 and 50-period SMAs on the 15-minute chart are currently bearish, with the 20-period line crossing below the 50-period to confirm a short-term downtrend. On the daily timeframe, the 50-period EMA is below the 200-period, indicating medium-term bearish bias. Price has not shown a meaningful retest of these moving averages, suggesting continued downward pressure for the next few hours.

MACD & RSI

The MACD line has turned bearish, with a negative histogram growing in strength post-190000 ET, aligning with the selloff. RSI has dropped to 28 by 120000 ET on 2025-10-03, entering oversold territory and potentially signaling a near-term bottom. However, the RSI has not shown a bullish divergence yet. Momentum remains on the bearish side, with no clear reversal signals detected.

Bollinger Bands

Bollinger Bands have expanded significantly during the morning ET hours, reflecting heightened volatility. Price has moved below the lower band at several points during the selloff, especially between 020000 and 083000 ET, indicating heightened bearish sentiment. The recent contraction in band width around 100000–113000 ET suggests a potential reversal or consolidation period, though no strong bounce has materialized yet.

Volume & Turnover

Volume surged during the selloff, with the highest volume candle at 223000 ET on 2025-10-02 printing a 12,943.4 volume and a 0.764 close. Notional turnover followed a similar pattern, with a clear bearish confirmation between 020000 and 050000 ET. Price and turnover have shown some divergence around 080000–100000 ET, suggesting a potential false breakdown scenario. However, the overall bearish volume profile has been consistent with the downward price trend.

Fibonacci Retracements

Fibonacci retracements applied to the recent 15-minute swing (0.737 to 0.779) show 0.749–0.750 as a key 38.2% level and 0.737 as a critical 61.8% support. On the daily chart, a retracement from the recent high of 0.779 to 0.737 shows a similar alignment with 0.748 as a potential near-term pivot point. Traders should watch for a test of these levels for confirmation of either a bullish reversal or continued bearish momentum.

Backtest Hypothesis

The proposed backtesting strategy involves entering a short position on a 15-minute bearish engulfing pattern that forms above a key Fibonacci 61.8% level, followed by a stop loss just above the engulfing candle’s high. A take profit is set at the next 38.2% retracement level. This strategy would align with the bearish engulfing pattern at 0.758 and the 61.8% level at 0.737, suggesting a potentially lucrative short trade with risk-reward in favor of bearish continuation. This approach requires confirmation via RSI divergence and increased volume to validate the pattern.