Market Overview for Ethereum/Dai (ETHDAI) on 2025-10-14

• ETHDAI traded in a bearish consolidation pattern after reaching a 24-hour high of 4290.42 and closing at 3974.74.
• Momentum weakened with RSI near oversold levels and MACD showing bearish divergence.
• Volume spiked during the early recovery phase but faded as the trend reversed.
• A key support level was retested at 3924.85, with potential for further downside if broken.
• Volatility expanded during the early session, with price testing Bollinger Band extremes before contracting.

Ethereum/Dai (ETHDAI) opened at 4125.50 on 2025-10-13 at 12:00 ET, reaching a high of 4290.42 before closing at 3974.74 on 2025-10-14 at 12:00 ET. Total volume for the 24-hour period was 142.71 ETH, with a turnover of approximately 578,305 DAI. The pair experienced a sharp decline in the early hours, following a brief bullish attempt after an initial rally.

On the 15-minute chart, ETHDAI formed a bearish continuation pattern, characterized by a large bearish engulfing candle and a long lower shadow in the early morning session. The price failed to sustain above key resistance levels formed around the 4169.63 and 4265.91 areas. This suggests a potential shift in sentiment from bullish to bearish, particularly after the 15-minute candle closed below the low of the prior engulfing candle, a potential trigger for shorting strategies.

Moving averages on the 15-minute chart showed a bearish crossover between the 20 and 50 EMA lines. On the daily chart, the 50 SMA provided a short-term resistance that the price failed to break through, reinforcing the bearish bias. The MACD line crossed below the signal line in the early morning, signaling weakening momentum, while RSI dropped below 30, indicating potential oversold conditions.

Bollinger Bands illustrated a period of high volatility in the early hours, with price touching the upper band before collapsing toward the lower band. This contraction in the bands as the session progressed suggests a potential lull in volatility, but a retest of key support levels below 3974.74 could lead to a breakout. A 61.8% Fibonacci retracement level at 3924.85 appears to be a critical area of interest.

The MACD histogram showed a bearish divergence, with price making higher lows while the MACD made lower lows, suggesting weakening momentum in any short-term rally. RSI remained in the oversold region for much of the session, hinting at a possible bounce near that threshold, but with no immediate reversal signs. Volume analysis highlighted strong selling pressure after 02:00 ET, with several large-volume bars driving price down sharply.

Looking ahead, a break below the 3924.85 level could trigger further bearish action, potentially targeting earlier lows in the 3899.55 to 3850 range. Conversely, a rebound above the 3974.74 level may see a temporary pullback toward the 3995.57 area, but a sustained move above that would be unlikely without a shift in broader market sentiment. Investors should remain cautious given the elevated volatility and the bearish momentum indicators.

Backtest Hypothesis

To run an accurate back-test of the proposed strategy, confirmation of the following parameters is required:

1. Symbol: Confirm if “ETHDAI” is the exact ticker / exchange code to be used for the backtest. If the data source requires a different format (e.g., “ETHDAI.BIN” or “ETH-DAI”), please specify.

2. Entry Rule: The strategy detects a Bearish Engulfing candlestick on the 15-minute chart. A short position is opened only after a subsequent 15-minute candle closes below the low of the engulfing bar (this is the “confirmation”). Confirm if this interpretation is accurate.

3. Exit Rule: The phrase “hold for 15-minute close below confirmation” could be interpreted in several ways. Clarify which of the following applies:

4. a) Close the position after exactly one 15-minute bar has closed (i.e., hold for one bar).
5. b) Close when any later 15-minute candle closes back above the confirmation level (i.e., price recovers).

6. c) Another rule such as a fixed number of bars, stop-loss / take-profit percentages, or ATR-based exit.

7. Risk Controls: Specify whether additional constraints such as stop-loss, take-profit, or maximum holding periods should be applied alongside the exit rule above.

Once these details are confirmed, the signal file can be generated, and the back-test can be run from 2022-01-01 to today to evaluate the strategy’s performance.