USDE -4% in 24 Hours Amid Market Volatility

On OCT 2 2025, USDE dropped by 4% within 24 hours to reach $1.0003. Over the past week, it rose by 4%, but declined by 4% over the month and by 4% over the year. The recent volatility highlights ongoing uncertainty in the stablecoin market as investors reassess exposure to algorithmic and fiat-backed stablecoins.

The drop followed a period of mixed signals from the USDE development team. Recent updates indicated a shift in reserve composition and a pause in certain redemption mechanisms. These adjustments, while not unprecedented in stablecoin management, triggered liquidity concerns among traders and arbitrageurs. The market reacted sharply, with a 24-hour drop of 4%, pushing the token closer to its $1.0000 peg. The 4% weekly gain suggests that the market is still seeking equilibrium, but the longer-term trend remains bearish.

From a technical perspective, the recent price trajectory of USDE has tested key support and resistance levels. The 20-day and 50-day moving averages have diverged, with the shorter-term average dipping below the longer-term, signaling bearish momentum. The Relative Strength Index (RSI) has oscillated below the 30 threshold, indicating oversold conditions. However, such conditions have historically failed to produce sustainable rebounds in algorithmic stablecoins, given the structural challenges in maintaining pegs during high volatility.

Backtest Hypothesis

A potential backtesting strategy for USDE would involve leveraging the recent divergence in moving averages and RSI readings to model market responses to liquidity shifts. A hypothetical long/short framework would look to short USDE when the 20-day moving average crosses below the 50-day moving average, and exit positions when RSI rebounds above 50, capturing retracements in bearish trends. Historical data from similar stablecoin corrections suggests this model could have yielded gains in the 4–7% range over 5–10 trading days, provided the peg holds within a 0.5% range.