Market Overview for SKALE/Tether (SKLUSDT): Volatility Intensifies in Bearish Bias

• SKLUSDT declined 4.8% over 24 hours, breaking below key support at $0.0254
• High volatility seen in 15-min candles, with bearish engulfing patterns forming
• Volume surged during the initial 3 hours, confirming bearish momentum
• RSI indicates oversold conditions near 30, suggesting potential short-term bounce
• Bollinger Bands show price near the lower band, signaling increased bearish pressure

Market Summary

The SKALE/Tether pair opened at $0.02557 on 2025-10-03 12:00 ET and closed at $0.02476 on 2025-10-04 12:00 ET, marking a 4.8% drop. Price ranged between $0.02587 (high) and $0.02432 (low) in the 24-hour period. Total trading volume across 96 15-minute candles reached 35,848,366.0 SKLUSDT, with a notional turnover of $902.25 million, based on average pricing. This sharp bearish move shows a clear loss of short-term bullish momentum.

Structure & Formations

The price structure formed multiple bearish signals, including bearish engulfing patterns and a doji near the key support level of $0.0254. The pair broke below this level, confirming bearish control. A potential support level appears to be forming around $0.02475-0.02480, which has acted as a floor multiple times during the selloff. The nearest resistance is at $0.02510, though a breakout there may require a significant reversal in sentiment.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages are both below the current price, reinforcing the bearish bias. The daily 50, 100, and 200-period moving averages also remain above the closing price, suggesting a broader downtrend. A crossover of the 20-period moving average on the 15-minute chart could indicate a short-term bear trap or a continuation of the bearish phase.

MACD & RSI

The MACD line shows a bearish divergence, with the histogram shrinking slightly as the price continues to fall. RSI has dropped to 30, suggesting that the pair may be oversold. However, this is not a guaranteed reversal signal and could simply reflect a continuation of the trend. A closing above $0.02490 could bring RSI back into neutral territory, but this is unlikely without a significant bullish catalyst.

Bollinger Bands

The price has spent much of the 24-hour period near or below the lower Bollinger Band, indicating heightened volatility and strong bearish pressure. A retest of the upper band at around $0.02535 is unlikely without a sharp reversal. The recent volatility contraction observed in the early morning hours suggests a potential buildup for a move, though it remains to be seen whether this will be bearish or bullish in nature.

Volume & Turnover

Volume was highest during the early part of the 24-hour window, particularly between 16:00 and 19:00 ET on October 3. This coincided with the price breaking below $0.0254. The volume profile has since remained moderate, with no significant spikes suggesting renewed buying or selling pressure. The total notional turnover of $902.25 million aligns with the volume distribution, showing no signs of divergence between price and volume.

Fibonacci Retracements

Applying Fibonacci retracements to the most recent 15-minute swing from $0.02587 to $0.02432, key levels include 61.8% at $0.02465 and 38.2% at $0.02512. Price has tested the 61.8% level multiple times, forming a potential support zone. A breakdown below this level could target the next Fibonacci level at $0.02448. On the daily chart, the 61.8% retracement of the broader bearish move lies around $0.02435, suggesting potential exhaustion if the price stabilizes there.

Backtest Hypothesis

A potential backtesting strategy involves entering a short position on a bearish engulfing pattern with confirmation via a break below the 20-period moving average on the 15-minute chart. Stops could be placed above the recent high of the pattern, while targets would align with the 61.8% Fibonacci level. Given the recent oversold RSI and low volume, this strategy may benefit from a tight risk-reward ratio but must be monitored for false breakouts or sudden reversals due to external macroeconomic triggers.