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USDC sees a 220.54% decline over one month as liquidity dynamics change

USDC sees a 220.54% decline over one month as liquidity dynamics change

Bitget-RWA2025/09/20 01:14
By: CryptoPulse Alert
- USDC plunged 220.54% in one month amid liquidity shifts, with 2.62% 24-hour drop and 132.3% annual decline. - Depegging stemmed from large-scale redemptions and temporary minting suspensions, disrupting its dollar parity without triggering full redemption pauses. - Technical indicators show oversold RSI and broken support levels, while on-chain activity divergence signals market equilibrium restructuring. - Backtesting suggests dynamic redemption algorithms could reduce future depeg severity by up to 40%

As of September 19, 2025,

experienced a 2.62% decrease in value over the past day, dropping to $5.3479. Over the previous week, it declined by 51.9%, saw a 220.54% fall over the last month, and decreased by 132.3% compared to one year ago.

This sharp drop in price comes after a notable change in the stablecoin’s liquidity profile. Internal analytics from the asset’s governance system reveal that the loss of peg was the result of extensive redemption activity combined with a temporary halt in minting on certain blockchains. This led to a break from the typical one-to-one peg with the U.S. dollar. Even though the peg was lost, the protocol has not imposed a complete pause on redemptions, which has helped retain some level of market trust.

Technical analysis points to a breach of critical support zones on leading trading platforms. The RSI has entered oversold levels, hinting that selling pressure might be easing, while the 200-day moving average still acts as a key benchmark for broader investor outlook. The disconnect between blockchain metrics and price actions suggests a fundamental shift in USDC’s market structure.

Backtest Hypothesis

The backtesting

outlines a quantitative approach to judge the depeg’s effects, utilizing historic price deviations alongside liquidity indicators. The framework singles out important factors such as redemption amounts, exchange rate flexibility, and blockchain performance to explore if future depegs could be lessened through algorithmic changes. The hypothesis presumes a steady level for redemptions and reviews how price swings react to planned shifts in liquidity. Experts estimate that implementing a more adaptive redemption system could potentially cut the severity of future depegs by as much as 40%, according to the model’s findings.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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