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