COTI +257% in 24 Hours Amid Algorithmic Stablecoin Rebalancing

On SEP 8 2025, COTI surged by 256.99% within 24 hours to reach $0.05044, marking a sharp reversal after a broader downward trend. Over the past week, the token fell 5.96%, with a 265.2% decline recorded over the month and a staggering 5748.94% drop over the last year. This recent volatility comes as the protocol undertakes a multi-phase rebalancing of its algorithmic stablecoin infrastructure.

COTI’s algorithmic stablecoin mechanism has entered a recalibration phase, triggered by a sustained imbalance between its native token and the collateralized assets underpinning the stablecoin. The adjustment aims to stabilize the peg between the COTI-backed stablecoin and the U.S. dollar. According to on-chain analytics, the system executed a series of liquidity redistribution events during the past 48 hours, which correspond with the sharp price spike observed on SEP 8. These redistribution events have historically been associated with short-term price swings, driven by the automated market-making functions of the protocol.

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The market response to the rebalancing efforts has been mixed. While the 24-hour rally suggests a short-term inflow of confidence, the weekly and monthly figures reveal ongoing structural challenges. Analysts project that the success of the rebalancing will depend on the speed at which the system can rebalance its reserves without triggering further slippage in the stablecoin’s peg. Several key metrics, including redemption rates and reserve ratios, will be critical in determining the trajectory of COTI’s price over the coming weeks.

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The technical underpinnings of COTI’s price movement are closely tied to its use of moving averages and on-chain liquidity signals. The 200-day exponential moving average (EMA) has remained below the 50-day EMA for much of 2025, indicating a bearish trendline. However, the recent 24-hour spike brought the 50-day EMA closer to the 200-day EMA, raising the possibility of a near-term trend reversal. This convergence, combined with increased redemption activity, has drawn renewed attention to COTI’s algorithmic model.

Backtest Hypothesis

A proposed backtesting strategy is centered on leveraging the convergence of the 50-day and 200-day EMAs as a predictive signal. The strategy suggests initiating a long position when the 50-day EMA crosses above the 200-day EMA, accompanied by a significant increase in redemption volume. A trailing stop-loss is recommended to mitigate downside risk in case of a sudden divergence. This hypothesis aligns with the observed price pattern on SEP 8, where the 50-day EMA moved closer to the 200-day EMA ahead of the sharp rally.

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