USDC +11.67% Amid Market Volatility and Redeemability Adjustments

On SEP 19 2025, USDC rose by 11.67% within 24 hours to reach $5.3199, USDC dropped by 104.17% within 7 days, dropped by 271.92% within 1 month, and dropped by 184.15% within 1 year.

Over the past week, the stablecoin USDC has faced unprecedented volatility and liquidity constraints. A key development was the announcement of temporary suspension of redemptions for the token, citing a need to preserve system integrity amid heavy outflows. This measure, while intended to stabilize the asset, triggered immediate market reactions and raised questions about the long-term viability of USDC as a reliable stablecoin.

The move follows a broader pattern of capital flight from stablecoins, driven by concerns over peg stability and regulatory uncertainty. While the redemption halt was described as a short-term solution, it has led to a loss of confidence among institutional holders and traders. Market observers noted that the pause disrupted arbitrage mechanisms and widened spreads between USDC and other stablecoins, further contributing to price divergence.

Technical indicators have shown a sharp divergence between USDC and traditional benchmarks. The RSI has entered oversold territory, suggesting a potential short-term rebound, although the overall bearish trend remains intact. Analysts project that the market will closely monitor the resumption of redemptions and any additional measures the issuer may announce.

The issuer has also outlined preliminary steps toward a revised governance model, including the introduction of a multi-collateral structure to diversify risk and increase transparency. While these proposals are still in the early stages, they represent a strategic pivot in response to recent challenges. The firm emphasized its commitment to maintaining USD parity and restoring market confidence through enhanced oversight and liquidity management.

Backtest Hypothesis

The backtesting strategy under consideration focuses on identifying potential entry and exit points in USDC based on the interplay between RSI levels and moving average crossovers. The approach assumes that periods of extreme oversold conditions may precede short-term recovery phases, particularly in the context of limited liquidity. The model uses a 14-day RSI threshold of 30 as a trigger for potential long positions, while a 200-period moving average is used as a reference for trend direction.

Historical performance of this strategy is being evaluated across multiple timeframes to assess its robustness in both stable and volatile conditions. A key variable is the redemption status, which can significantly impact the effectiveness of the indicators. The strategy is designed to be adaptive, with stop-loss and take-profit parameters adjusted based on real-time volatility and liquidity metrics.