Treehouse/Tether Market Overview: 2025-10-10

• Treehouse/Tether (TREEUSDT) fell 7.4% in 24 hours, with a bearish breakdown below key support levels after a volatile midday sell-off.
• Volume spiked to 7.4M during the 15:00–16:00 ET selloff, with turnover surging to $2.2M as price dropped from $0.2392 to $0.2236.
• RSI entered oversold territory below 30 late afternoon, but no immediate reversal formed, suggesting bearish exhaustion may still lag.
• Bollinger Bands showed a widening trend as volatility increased, with price closing near the lower band, signaling potential for a bounce.
• A bearish engulfing pattern formed at the 16:00 candle, confirming a shift in sentiment to the downside as shorts gained control.

Treehouse/Tether (TREEUSDT) opened at $0.2366 on 2025-10-09 at 12:00 ET, reached a high of $0.2423 the following day, and closed at $0.2236 at 12:00 ET. The 24-hour volume was 39,364,467.9 with a notional turnover of $8,819,920. The pair showed a sharp selloff in the late afternoon session, breaking below a key 15-minute support at $0.232 and falling into oversold RSI territory.

Structural support levels were broken during the 15:30–16:30 ET window, with price closing below $0.232 after multiple attempts to recover. A bearish engulfing pattern at 16:00 ET confirmed a shift in momentum. Resistance levels at $0.237 and $0.242 were invalidated, with price failing to rebound from either.

The 20-period and 50-period moving averages on the 15-minute chart showed a steepening bearish crossover, reinforcing the downward trend. Bollinger Bands widened sharply during the sell-off, with price closing near the lower band, indicating potential for a bounce back into the channel. RSI dropped below 30 but showed no immediate reversal signs, suggesting bearish pressure remains in control.

Fibonacci retracement levels aligned with key support and resistance levels from the previous day’s swing high and low. The 61.8% retracement at $0.2293 acted as a minor floor but failed to hold through the final hours. Volume and turnover spiked during the 15:00–17:00 ET window, aligning with the sharp selloff, but diverged from price in the final hour as volume waned, indicating possible short-term exhaustion.

Backtest Hypothesis

The backtesting strategy described involves a bearish breakout approach based on a validated bearish engulfing pattern and a break of the 50-period moving average on the 15-minute chart. The strategy would look for the following conditions:

1. A bearish engulfing candle closes below the 50-period moving average.
2. Volume increases sharply with the engulfing candle and remains above average.
3. RSI drops below 30 but does not reverse above the 40 level within two candles.

If these conditions are met, the strategy would trigger a short entry with a stop loss above the engulfing candle’s high and a target at the 61.8% Fibonacci level of the most recent swing high and low. The strategy would also require a trailing stop to lock in profits as price continues to fall. Given the pattern and conditions observed in the 16:00 ET candle and the following sell-off, this strategy would have been triggered during the session and would now be in effect as of 12:00 ET on 2025-10-10.