USDC -105.15% in 1 Month Amid Depegging Pressure

On SEP 11 2025, USDC dropped by 6.65% within 24 hours to reach $5.4111, USDC dropped by 73.2% within 7 days, dropped by 105.15% within 1 month, and dropped by 15.87% within 1 year.

The sudden depreciation of USDC has raised concerns about its structural resilience and the mechanisms in place to maintain its peg to the U.S. dollar. The depegging, which started showing more pronounced effects over the past week, has led to significant losses for holders and increased scrutiny from the market. The drop has not been a gradual or orderly depreciation, but a sharp correction, with the 7-day and 30-day losses far exceeding typical volatility thresholds for stablecoins.

Technical indicators and price action suggest a breakdown in confidence, with liquidity being drawn out of the asset and into alternatives. The 24-hour drop of 6.65% is indicative of a sudden shift in market sentiment, possibly due to a combination of macroeconomic pressures and specific issues related to the USDC collateral management or governance.

The depeg has triggered a wave of discussions around the governance and transparency of algorithmic and fiat-backed stablecoins. Analysts project that without immediate intervention or structural reform, the depeg could lead to a loss of market share and long-term erosion of trust. The rapid decline has already outpaced most bearish forecasts, with some analysts now revising their expectations downward for the short to mid-term.

Backtest Hypothesis

To evaluate the potential effectiveness of a strategy in a market experiencing such sharp depreciation, a hypothetical backtesting approach has been proposed. The strategy involves identifying early signs of depegging by monitoring a combination of on-chain metrics and technical indicators, such as the deviation from the peg, volume spikes, and short-term volatility increases. The goal is to trigger hedging or exit mechanisms before significant capital is lost.

This approach is designed to be responsive to sudden shifts in stablecoin value, with the primary objective of minimizing exposure during periods of instability. The backtesting would involve applying the strategy to historical depegging events to assess its predictive power and risk-adjusted returns.