Stacks/Tether Market Overview

Summary
• Price declined sharply in the early hours of 2025-11-06, breaking below key support levels.
• Volatility increased as the RSI approached oversold territory, signaling potential short-term bounce.
• Volume surged during the decline, suggesting strong bearish conviction and weak short-covering activity.
• Bollinger Bands showed a recent expansion, aligning with the increased price movement.
• A bullish reversal pattern formed near 0.3423, hinting at a potential rebound in the near term.

Opening Narrative

Stacks/Tether (STXUSDT) opened at 0.3562 on 2025-11-05 at 12:00 ET, surged to 0.3635 before declining sharply to 0.3423, and closed at 0.3465 at 12:00 ET on 2025-11-06. The total 24-hour volume was 3,372,482.8 STX with a turnover of $1,170,275. The price action reflects heightened bearish momentum and increasing volatility in the pair.

Structure & Formations

The candlestick structure over the 24-hour period displayed a series of bearish engulfing patterns during the early morning, followed by a long bearish candle breaking below key support at 0.3531. A potential bullish reversal pattern formed around 0.3423 as buyers stepped in after a sharp drop. Notable support levels identified include 0.3466 and 0.3423, with resistance at 0.3531 and 0.3552. A doji candle at 0.3472 suggests indecision in the market, potentially preceding a reversal or continuation.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages were in bearish alignment (death cross), reinforcing the downtrend. The 50-period MA sat above the 100 and 200-period MAs on the daily chart, indicating a medium-term bearish bias. Price remained below all key MAs, reinforcing the bearish structure and suggesting a continuation of the trend is likely unless a strong reversal is confirmed.

MACD & RSI

The MACD showed a bearish crossover in the early morning hours, with the histogram contracting slightly as the price approached oversold territory in the RSI. The RSI, which dropped to 28.3, suggests STXUSDT may be due for a temporary bounce. However, the negative MACD and bearish divergence between price and RSI indicate the underlying bearish momentum remains strong and a sustainable reversal is not yet confirmed.

Bollinger Bands

The Bollinger Bands widened significantly during the sharp selloff, reflecting increased volatility. Price traded near the lower band for several hours, particularly between 05:00 and 08:00 ET, suggesting oversold conditions. While the price has since moved slightly away from the band, it remains near the lower end, indicating a potential short-term bounce may be supported by the 0.3466–0.3483 range before resuming the downtrend.

Volume & Turnover

Volume increased sharply during the morning and afternoon selloff, peaking at 204,749.3 STX around 14:45 ET. This was accompanied by a corresponding increase in turnover, confirming bearish conviction. However, volume diminished slightly in the late afternoon and early evening, despite the price rebounding, suggesting weak short-covering activity and a lack of buying conviction to sustain a reversal. The divergence between volume and price movement raises concerns about the strength of the potential bounce.

Fibonacci Retracements

The recent 15-minute swing from 0.3635 to 0.3423 aligns with key Fibonacci levels at 38.2% (0.3544), 50% (0.3529), and 61.8% (0.3513). The price briefly tested 0.3544 before falling back down, indicating this level may act as a magnet for potential bounce or rejection. On the daily chart, the 61.8% level at 0.3531 has been a key area of contention. A sustained close above 0.3531 could validate a short-term reversal, but until then, the bearish bias remains intact.

Backtest Hypothesis

Given the strong bearish momentum and potential for a short-term bounce, a viable backtest strategy could involve entering long positions on STXUSDT when the price closes above key Fibonacci retracement levels (e.g., 0.3531 or 0.3544) and RSI exits oversold territory. A stop-loss could be placed below the most recent support level, with a target aligned with the 50/61.8% Fibonacci levels. The strategy would be tested using daily RSI data from 2022-01-01 to 2025-11-06 to evaluate its effectiveness in a bear market context.