Four/USDC Market Overview: Volatility, Breakouts, and Divergences in a High-Activity Day

• FORMUSDC opened at 1.1296 and closed at 1.1729, with a high of 1.35 and a low of 1.1731 over the 24-hour period.
• Price surged past 1.30, indicating strong bullish momentum before consolidating in the final hours.
• Volatility expanded significantly as price traded near the upper Bollinger Band during the early morning ET.
• A large-volume candle at 08:30 ET pushed the price to 1.35, marking a key resistance level and potential reversal zone.
• RSI moved into overbought territory, suggesting a possible pullback or consolidation in the near term.

Four/USDC (FORMUSDC) opened at 1.1296 on 2025-09-23 at 12:00 ET and closed at 1.1729 on 2025-09-24 at 12:00 ET, reaching a 24-hour high of 1.35 and a low of 1.1731. Total volume traded over the period was approximately 360,657.4 units, with a notional turnover of $475,465. The pair displayed notable volatility and directional shifts, particularly during the early morning hours.

Key support levels appeared near 1.1731–1.1822, with price bouncing from these levels multiple times. Resistance levels were identified at 1.30, 1.35, and 1.2606. A strong bullish engulfing pattern occurred at the 08:30–08:45 ET time frame, where the candle closed near the high of 1.35. This suggests aggressive buying pressure. A doji at 08:45–09:00 ET following this breakout hinted at potential exhaustion or consolidation.

MACD showed a sharp positive divergence in the morning hours, with bullish momentum aligning with the large-volume candle. RSI peaked above 70, indicating overbought conditions and raising the risk of a pullback. Bollinger Bands expanded significantly as price pushed to the upper band during the early morning, suggesting a potential reversal. Fibonacci retracement levels applied to the 1.1731–1.35 swing identified 1.2606 (61.8%) and 1.2446 (50%) as key areas for possible support and reaccumulation.

Volume spiked sharply during the 08:30–09:00 ET window, coinciding with the breakout to 1.35, and again in the late afternoon as price consolidated near 1.1802–1.1912. This volume surge confirmed the strength of the move, though divergences appeared in the final hours of the session as price declined with relatively lower volume. This suggests caution in interpreting the breakout as fully sustainable.

Backtest Hypothesis
A potential backtesting strategy could focus on identifying strong bullish breakouts followed by overbought RSI conditions and high-volume candles. This approach would involve entering long positions after a bullish engulfing pattern, particularly when it occurs near key Fibonacci levels, and exiting when RSI re-enters neutral territory or price tests the upper Bollinger Band. A stop-loss could be placed just below the breakout level. Given the volatility and divergence seen in the final hours, incorporating a trailing stop or tight take-profit near 1.2606 may be prudent.