USDE -11.99% Over One Month Amid Liquidity and Stability Concerns

On SEP 21 2025, USDE dropped by 9.99% within 24 hours to reach $0.9997, USDE dropped by 11.99% within 7 days, dropped by 11.99% within 1 month, and dropped by 11.99% within 1 year.

The recent sustained depreciation of USDE has sparked renewed scrutiny over its underlying collateral and redemption mechanisms. The stablecoin, designed to maintain a 1:1 peg to the US dollar, has deviated significantly from its reference value, raising concerns about systemic risks within the broader stablecoin market. Over the past month, USDE has lost 11.99% of its value, prompting investors and developers alike to reevaluate its risk profile and governance structure.

Technical analyses have pointed to liquidity imbalances and a lack of transparency in reserve composition as potential contributing factors. Recent disclosures revealed that the reserve assets backing USDE include a higher-than-anticipated proportion of non-cash instruments and long-term treasuries, which may complicate rapid redemptions during periods of high demand. Analysts project that a sustained loss of confidence could trigger a feedback loop of redemptions and further devaluation, especially if redemption channels become congested or unreliable.

Backtest Hypothesis

A proposed backtesting strategy aims to evaluate the resilience of USDE in conditions of heightened redemptions and declining market confidence. The model incorporates simulated redemption volumes, liquidity ratios, and redemption channel efficiency to assess the stablecoin's capacity to maintain its peg under stress. The strategy employs a series of technical indicators, including moving averages and volatility thresholds, to trigger simulated sell-offs and redemption spikes. The results of this backtest will provide a more granular understanding of the conditions under which USDE could deviate from its dollar peg and the potential speed of recovery once market stability is restored.