USDC Drops 12.23% Over 24 Hours Due to Regulatory Challenges and Technical Issues

On SEP 18 2025,

experienced a 12.23% decline over the course of 24 hours, falling to $5.306. Over the past 7 days, USDC saw a total decrease of 123.94%, dropped 295.69% in the last month, and was down 208.13% year-over-year.

The abrupt and significant drop in USDC’s value highlights a combination of regulatory pressures and technical failures within its framework. Recent reports have exposed increased regulatory attention on stablecoins, creating uncertainty for institutional investors and leading to a reevaluation of USDC’s risk. One of the main issues is related to the asset reserves backing USDC, with some sources pointing to a lack of clarity regarding its reserve transparency.

Technical signals have also turned negative, as USDC’s price fell below major support points—an indication that the downward movement might persist. Market participants have observed a growing spread between buy and sell orders, which has contributed to rising price swings. These circumstances have led many in the market to adopt a more cautious approach, with liquidity providers cutting back their involvement.

Experts believe that regulatory developments will continue to play a central role in shaping USDC’s immediate outlook. The latest guidance from the Federal Reserve regarding stablecoin oversight has further fueled market apprehension, leaving participants awaiting more definitive regulatory clarity. Still, some analysts stress that dollar-backed stablecoins have inherent structural strengths that could support their stability over time.

The recent volatility has sparked renewed debate among developers and protocol teams, who are actively considering new solutions to help reestablish trust in USDC’s peg. Nevertheless, no clear resolution has been found, and the market is largely in a holding pattern.

Backtest Hypothesis

A backtesting

has been suggested to assess potential exit strategies for USDC during its rapid downturn. This approach involves applying moving averages and RSI metrics to pinpoint when bearish trends may have been overextended in the short term. The method utilizes a crossover of the 50-period and 200-period moving averages as the primary indicator, with confirmation from an RSI reading below 30 to identify oversold scenarios. The goal is to examine how a rules-based exit and re-entry plan could limit losses during market declines.

This model is based on a fixed investment amount and triggers sell actions when the 50-period moving average moves below the 200-period line, while a stop-loss is implemented if the RSI drops deeper into oversold territory. Buy orders are placed when the moving average trend reverses or when the RSI climbs back above 50. The intent is to determine whether these technical tools could have helped reduce risk during the latest USDC drop, offering a potential approach for managing the volatility of stablecoins in the future.