- Circle stock price has retreated into a local bear market.
- The company has solid fundamentals, including the rising USDC transactions.
- Circle share has formed a break-and-retest pattern, pointing to a rebound in the near term.
Circle stock has dropped and moved into a local bear market after falling by over 30% from its highest point this month. Still, this retreat could be brief as the company has some notable catalysts, including the recently announced partnership between Coinbase and Fannie Mae.
Circle Stock is Backed by Solid Fundamentals
CRCL stock price may rebound due to its strong fundamentals. First, the company may benefit from the recently announced partnership between Coinbase and Fannie Mae, a major player in the U.S. mortgage industry.
Coinbase will facilitate a crypto-backed mortgage, which will be facilitated by Better Finance, a top company with a market capitalization of over $500 million. Crypto holders will now be able to pledge their holdings as collateral for a separate loan used to cover the down payment. USDC and Bitcoin will be the initial accepted coins.
Circle stock will also benefit from the ongoing surge in USDC stablecoin usage. Data shows that the market capitalization of all USDC in circulation has jumped to $80 billion, a figure that may cross the $100 billion mark in the next few months.
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If this happens, the company will make more money by investing in short-term government bonds. Also, the volume of USDC stablecoin transactions jumped to over $6.2 trillion in the last 30 days, far above USDT’s $1.2 trillion.
Circle’s appeal is that it is the largest stablecoin in the United States, which is regulated by the GENIUS Act. It is much bigger than other stablecoins like PayPal USD (PYUSD) and Ripple USD (RLUSD). As such, it stands a better chance of reaching deals with big companies that are considering implementing stablecoins in their operations.
Circle is also expanding its business by launching new products, a move that will help it to offer more solutions. It has launched the USYC money market fund, which has accumulated over $2.5 billion in assets. Its Circle Payment Network (CPN) will also bring in huge sums of money in the future as it disrupts the Swift Network.
CRCL Stock Price Forms Break and Retest Pattern
The daily timeframe chart shows that the CRCL share price has slumped in the past few days. This retreat happened because of the recent CLARITY Act news, which showed that the bill will prevent companies like Coinbase from earning interest.
The stock has formed a break-and-retest pattern by moving back to $90, its highest point in December and January last year. A break-and-retest is one of the most common bullish continuation signs in technical analysis.
Therefore, these technicals suggest that the stock will likely rebound in the coming days or weeks, with the initial target to watch being this month’s high of $136. A move above that level will signal further gains, potentially to the psychological level at $200, which is about 110% above the current level.
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