Brief Depeg: USDC Stablecoin Dips to $0.74 on Binance

• Stability of Circle's USDC Stablecoin Tested Amid Market Sell-Off
• Momentary Price Fluctuations
• Trading Pair's Market Depth
• Impact of Matrixport's Report
• Last USDC Peg Loss

Stability of Circle's USDC Stablecoin Tested Amid Market Sell-Off

Today, Circle's USDC, a dollar-pegged stablecoin, experienced a noteworthy decline, falling down to a low of $0.74 three times. This decline was part of a larger market sell-off, triggered by a report that raised concerns about the potential approval of a spot bitcoin (BTC) ETF this month.

Momentary Price Fluctuations

In a span of 11 minutes, between 12:10 and 12:21 UTC, USDC saw three significant drops to $0.74, $0.80, and $0.79 against its tether (USDT) trading pair on Binance. Immediately after these dips, the price rebounded to its original peg of $1. This type of fluctuation can happen when a trader sells USDC for USDT and there isn't enough liquidity to sustain the $1 peg.

Trading Pair's Market Depth

According to CoinMarketCap, the 2% market depth of the USDC/USDT pair on Binance is biased towards the upside, with $26 million in orders stacked up to $1.02 and $6.1 million in orders stacked down to $0.98. As a result, if a trader places a sell order larger than $6.1 million, the price would dip below $0.98. At 12:10 UTC, there was a volume worth $6.2 million, followed by a $4.3 million volume at 12:21 UTC.

Impact of Matrixport's Report

Following the release of a Matrixport report predicting that the SEC would reject numerous spot bitcoin ETF applications this month, over $500 million in derivative positions were liquidated. This stablecoin's trading pair has seen occasional slight depegging incidents over the past few months, although none of these incidents have exceeded a 4% change in either direction.

Last USDC Peg Loss

In March, USDC last lost its peg following the collapse of a Silicon Valley bank. This led it to trade down at $0.86 after it was revealed that Circle had a portion of the stablecoin's backing funds at the struggling bank.

Edited by Jonathan Stoker