Market Overview for XRP/Tether (XRPUSDT) on 2025-10-04

• XRP/Tether declined sharply after reaching a morning high of $3.0948, closing 1.8% lower at $3.0436.
• A bearish reversal pattern formed around 17:00 ET, followed by sustained selling pressure into the early hours of 10/04.
• Volatility remained elevated with high volume clusters, but price failed to hold key resistance levels.
• RSI approached oversold territory near 29.5, suggesting potential for a short-term bounce or consolidation.
• Bollinger Bands showed a recent contraction, indicating possible volatility increase ahead.

The XRP/Tether pair opened at $3.0528 on 2025-10-03 at 12:00 ET, reached a 24-hour high of $3.0948, and closed at $3.0436 as of 12:00 ET on 2025-10-04. During this period, total volume traded amounted to 34,779,716.8 USDT, with a notional turnover of $104.8 million. The pair has shown a bearish bias, with price retreating from earlier highs and consolidating below the 20-period moving average.

Structure and candlestick patterns indicate a strong bearish bias throughout the session. A notable bearish engulfing pattern formed around 17:00 ET as price gapped down from $3.0942 to $3.0620. This was followed by a series of lower highs and lower lows, confirming a downtrend. Key support levels were observed at $3.0400 and $3.0200, where price paused or bounced temporarily. A doji appeared near $3.0415 in the early morning, signaling indecision and potential for a near-term bounce.

The 15-minute chart shows price below both the 20-period and 50-period moving averages, reinforcing the bearish bias. The 50-period MA is around $3.0600, and the daily 50/100/200 MA cluster is above $3.0850, suggesting medium-term bearish momentum. MACD has remained negative, with the histogram showing a broadening divergence, indicating strengthening bearish momentum. RSI has fallen to 29.5, entering oversold territory, which may suggest a near-term bounce unless bearish fundamentals persist.

Bollinger Bands are currently in a narrow contraction phase, with price fluctuating near the lower band, indicating a potential increase in volatility. A breakout from this range could either confirm a short-term rebound or a continuation of the downtrend. Volume remained elevated during the initial decline, validating the bearish move, while recent volume has tapered off slightly, suggesting possible exhaustion.

Backtest Hypothesis

The backtest strategy involves entering long positions when price closes above the 50-period moving average on the 15-minute chart, with a stop-loss placed at the most recent swing low. A short position is triggered when price closes below the 20-period moving average, with a stop-loss at the most recent swing high. Using this framework and the recent 15-minute chart data, the strategy would have entered short positions around $3.0700 during the morning decline and held the position until price approached the key support level. The recent bearish engulfing pattern would have reinforced the validity of the short signal. However, given the RSI entering oversold territory, a modified version of the strategy could consider taking partial profits or tightening stops to manage risk.