BFUSD -21.01% Over 1 Month Amid Liquidity Concerns

BFUSD, a stablecoin pegged to the U.S. dollar, continued its downward trajectory on SEP 5, 2025, falling by 9.01% in the past 24 hours to trade at $0.9977. Over the past month and year, the token has declined by 21.01%, marking a significant underperformance relative to its $1.00 peg. The consistent price erosion has raised concerns among investors about the token’s liquidity and underlying collateral.

The decline has coincided with broader market uncertainty surrounding stablecoins, especially those not fully backed by U.S. Treasuries. Market participants have scrutinized BFUSD’s reserve composition and redemption process, leading to heightened volatility. Analysts project that the token may continue to trade below par if these liquidity issues remain unresolved.

The technical indicators used to evaluate BFUSD’s performance include the 50-period and 200-period moving averages, as well as the Relative Strength Index (RSI). The token has remained below its 200-day moving average for over 30 consecutive days, a bearish signal in classical chart analysis. The RSI has also lingered in oversold territory for nearly two weeks, suggesting that the asset could face a short-term rebound or consolidate further.

Backtest Hypothesis

A backtesting strategy was developed using historical BFUSD data, focusing on price crossover events between the 50-period and 200-period moving averages, combined with RSI thresholds. The hypothesis tested the viability of entering a long position when the 50-period moving average crossed above the 200-period line (a "golden cross"), and the RSI moved above 30, signaling potential oversold conditions. Conversely, short positions were triggered when the 50-period line crossed below the 200-period (a "death cross") and RSI dropped below 70, indicating overbought conditions. The strategy aimed to capture short-term directional movements while filtering out false signals through a 3-day confirmation rule.