Four/USDC Market Overview

• FORMUSDC surged from 1.18 to 1.6092 before retreating to 1.4901, showing strong intraday volatility.
• Price action formed a bearish harami and a bullish engulfing pattern during key turning points.
• Volume spiked at 2025-10-08 03:15 and 06:00 ET, aligning with sharp price reversals.
• RSI and MACD signaled overbought conditions during the peak at 1.6092, followed by bearish divergence.
• Bollinger Bands expanded during the breakout phase and compressed during consolidation at the close.

The Four/USDC trading pair opened at 1.1819 on October 7 at 16:00 ET, surged to a high of 1.6092 on October 8 at 02:00 ET, then closed at 1.4901 at 12:00 ET on October 8. Over the 24-hour period, total volume amounted to 6,626,685.3 with a notional turnover of approximately $9,753,000, reflecting high volatility and active trading.

The 15-minute chart displayed a dynamic reversal pattern starting with a bullish engulfing candle on October 7 at 19:30 ET, signaling a shift from bearish to bullish momentum. However, this was followed by a bearish harami pattern on October 8 at 03:15 ET, as the price action consolidated and reversed downward. Notable support levels emerged at 1.322, 1.450, and 1.490, while resistance levels formed around 1.495, 1.550, and 1.609. The 50-period and 20-period moving averages showed convergence at key points, reinforcing the idea of a strong trend reversal.

MACD displayed a bearish crossover shortly after the 1.6092 high, with the histogram showing a sharp decline in momentum. The RSI reached 76 during the peak, indicating overbought conditions, and then fell rapidly into the 50–60 range, suggesting a potential bearish trend. Bollinger Bands expanded during the sharp rally to 1.6092 and then contracted during the pullback to 1.4901, indicating reduced volatility and a period of consolidation. Prices closed near the lower band, suggesting a potential continuation of the downward move if support at 1.490 holds.

During the pullback to 1.4901, Fibonacci retracement levels showed that the price had retraced to 61.8% of the 1.18–1.6092 move, a key psychological level that could either trigger a bounce or break with a continuation. Volume and turnover confirmed the key reversals at 03:15 and 06:00 ET, with volume surging as the price moved against the initial trend. However, at the end of the 24-hour period, both volume and turnover declined, signaling a pause in aggressive trading and a potential consolidation phase. The divergence between price and momentum indicators, particularly RSI and MACD, highlights a high probability of further correction.

Backtest Hypothesis
Given the recent reversal patterns and overbought conditions identified in the RSI and MACD, a potential short-term trading strategy could involve entering a short position near the 61.8% Fibonacci level at 1.490 with a stop-loss above the 1.500 resistance and a target at the 1.450 support level. A trailing stop could be set to protect profits as the pair consolidates. This approach would aim to capitalize on the bearish momentum confirmed by the bearish harami and MACD divergence, leveraging both price action and indicator signals for entry and exit timing.