BFUSD -3.0% in 24 Hours Amid Persistent Depegging Pressure

BFUSD, the algorithmic stablecoin issued by Blockchain.com, fell to $0.9988 on SEP 7 2025, marking a 3% decline over the past 24 hours. The drop extended a broader trend of depegging, with the token registering a 3% drop over the past week, month, and year. The sustained divergence from its $1.00 target has raised concerns among investors and users about the mechanism's ability to maintain price stability. The recent movement coincides with increased scrutiny of algorithmic stablecoins following broader market turbulence.

The depegging of BFUSD reflects ongoing challenges in maintaining its dollar peg without sufficient collateral or market confidence. Unlike fully collateralized stablecoins, BFUSD relies on a basket of crypto assets and algorithmic adjustments to manage supply and demand. However, these mechanisms appear to have struggled under recent market conditions, leading to a steady erosion in value. The lack of a fixed reserve ratio or transparent rebalancing rules has further compounded uncertainty.

Technical indicators show that BFUSD is currently below key psychological support levels. The 50-day and 200-day moving averages both sit at $1.00 or above, suggesting a prolonged bearish trend. The Relative Strength Index (RSI) stands at 28, indicating oversold conditions. However, historically, an RSI this low has not always led to a rebound if the fundamental challenges remain unresolved. The Moving Average Convergence Divergence (MACD) is in negative territory, reinforcing the bearish momentum.

Backtest Hypothesis

Given the current technical setup and the nature of algorithmic stablecoins, a hypothetical backtesting strategy was developed to explore potential exit and entry points for BFUSD. The strategy is based on a combination of moving averages and RSI divergence. Specifically, it triggers a sell signal when the price closes below the 50-day moving average and RSI falls below 30, and a buy signal when the price crosses above the 50-day moving average and RSI rises above 70.

This approach is designed to capture short-term mean reversion patterns within the context of a structurally underperforming asset. While not a guarantee of success, the backtest aims to identify potential inflection points that could indicate a temporary reversal in the current downtrend. The results of such a strategy would be most relevant in a market environment where algorithmic mechanisms are expected to reassert control over supply and demand balances.