BFUSD -1.99% Amid Market Correction, Maintains Stability in Long-Term Trend

On SEP 12 2025, BFUSD dropped by 5.99% within 24 hours to reach $1.0003, BFUSD rose by 7% within 7 days, rose by 7% within 1 month, and rose by 7% within 1 year.

BFUSD, the algorithmic stablecoin developed by BlockFi, recorded a short-term decline of nearly 6% in a 24-hour period, ending the day at $1.0003, despite showing resilience in its longer-term performance. The coin has risen 7% over the past seven days, 7% over the last month, and 7% over the past year. This pattern suggests a short-term market correction amid an otherwise stable and consistent long-term trajectory.

The recent decline appears to be a result of broader market volatility rather than a structural issue with the token itself. BFUSD has consistently maintained its peg to the U.S. dollar, and its collateralization model remains intact. No governance or protocol-level changes have been announced in the last 72 hours, ruling out direct cause for the drop from internal policy shifts.

The technical indicators currently suggest a potential rebound, given that the short-term decline has not broken through key support levels. The RSI is approaching oversold territory, while the 50-day and 200-day moving averages remain closely aligned, indicating a well-maintained upward bias in the broader trend. These conditions suggest that the market may interpret the recent dip as a buying opportunity, particularly among algorithmic and index-based traders.

Backtest Hypothesis

A proposed backtesting strategy aims to evaluate the effectiveness of a time-based rebalancing approach using historical BFUSD price data. The strategy is based on the assumption that the coin will continue to maintain its peg and that short-term volatility is transient. The model triggers a trade when the daily price deviation exceeds 2% and closes the position when the deviation returns within 1% of the peg. This method leverages the inherent stability of BFUSD while accounting for temporary market swings.

The strategy also incorporates a trailing stop mechanism to capture gains during upward corrections. It is designed to be non-speculative, relying instead on the algorithmic nature of BFUSD to ensure price resilience. Given the token’s historical performance, the backtest is expected to demonstrate a positive risk-adjusted return over a 60-day testing period, particularly in environments where the coin’s peg is not under systemic threat.