Market Overview for Yearn.finance/Tether (YFIUSDT): Volatility Peaks Amid Key Support Tests

• Yearn.finance/Tether (YFIUSDT) closed lower after a volatile 24-hour session with multiple key support and resistance tests.
• Price action showed a bearish bias, with a 5.88% decline from the 24-hour high and a pullback to key Fibonacci levels.
• Momentum slowed as RSI approached oversold territory, but volume divergence suggests potential for a bounce.
• Volatility expanded sharply during the early part of the session, with a high-low range of $110 in the first 90 minutes.
• Bollinger Bands expanded to signal increased uncertainty, with price currently sitting near the lower band on the 15-minute chart.

The YFIUSDT pair opened at $5,571 on October 3 at 12:00 ET and reached a 24-hour high of $5,631 before declining to a low of $5,482, closing at $5,505 as of October 4 at 12:00 ET. The total 24-hour trading volume amounted to 148.5 BTC equivalent, with notional turnover reaching $838,500, reflecting a highly active and mixed sentiment session.

Price action over the 24-hour period was marked by a bearish reversal from the early high at $5,631, with a clear breakdown below the $5,600 level. A strong bearish engulfing pattern formed during the session at $5,505, indicating a potential shift in control to sellers. Key resistance levels appear at $5,590 and $5,600, while immediate support is forming near $5,500, which was tested multiple times.

Structure & Formations

The 15-minute chart revealed a distinct bearish trend after a short-lived bullish breakout in the early hours. A doji formed at $5,549 in the early morning, signaling indecision among traders. A key bearish pattern — a morning breakdown with a strong bearish engulfing candle — confirmed the shift in sentiment. The price appears to be forming a small descending triangle near the $5,500 level, which could lead to further downside if support fails.

Moving Averages

Using the 20 and 50-period moving averages on the 15-minute chart, the 50-period MA crossed below the 20-period MA, forming a death cross pattern. This suggests bearish momentum is gaining strength. On the daily chart, the 50-period MA is above the 100 and 200-period MAs, but the recent pullback has brought price closer to the 200-period MA, indicating potential for a longer-term correction.

MACD & RSI

The MACD histogram turned negative and widened during the late part of the session, reflecting increasing bearish momentum. RSI has dropped to the 30–35 range, signaling oversold conditions, but the divergence between price and RSI suggests that a short-term bounce could be imminent. However, the bearish trend remains intact unless RSI crosses back above 40 with strong volume confirmation.

Bollinger Bands

Bollinger Bands expanded during the morning session, reflecting heightened volatility. Price action currently sits near the lower band, indicating bearish momentum and a potential bounce. A close above the midline without a corresponding volume spike could signal a temporary pause in the decline, but the overall volatility profile remains elevated.

Volume & Turnover

Volume spiked significantly during the early part of the session, with a 20.31 BTC equivalent turnover at $5,581. However, volume has since declined, indicating a potential exhaustion of the bearish move. A divergence between price and volume during the late part of the session suggests traders may be positioning for a short-term bounce, but caution is warranted.

Fibonacci Retracements

Applying Fibonacci retracement to the recent swing from $5,631 to $5,482, key levels at 61.8% ($5,506) and 78.6% ($5,480) were hit during the session. The 61.8% level was tested twice without a strong bounce, indicating weak support. A break below $5,480 could bring the next level at $5,440 into play, suggesting the bearish trend has room to extend if momentum continues.

Backtest Hypothesis

Given the recent bearish engulfing pattern and the current positioning near key Fibonacci levels, a potential backtesting strategy could involve a short entry on a close below $5,500, with a stop placed above $5,530 and a target at $5,440. This aligns with the bearish momentum seen in the MACD and RSI, and the expanding Bollinger Bands suggest increased uncertainty that could lead to further downside. A long position may be considered if a strong bullish reversal occurs above the $5,560 level, confirmed by a bullish engulfing pattern and a volume spike.