- Circle stock price has rebounded in the past few weeks.
- The company will benefit from the CLARITY Act vote.
- It has moved to the third phase of the Wyckoff Theory, which is usually the longest one.
Circle stock price has done well in the past few days, and this uptrend may continue as the company publishes its financial results on May 11 this year. CRCL was trading at $120 on Thursday, up by 140% from its lowest level this year.
Circle Stock Has Potential Catalysts
The CRCL share price has several catalysts that could drive further gains in the coming months. First, and most importantly, is the fact that the USDC has become the most commonly used stablecoin in the industry.
Data shows that supply has jumped to nearly $80 billion, while adjusted transaction volume has risen to $4.6 trillion.
Second, data compiled by Polymarket shows that more traders are optimistic that the US Senate will ultimately pass the CLARITY Act in the coming weeks.
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Banks and companies in the crypto industry have reached a compromise that allows crypto companies like Coinbase and Kraken to offer stablecoin yields. This bill will increase demand for the USDC stablecoin over time.
Third, Circle stock will likely benefit from the ongoing revenue growth, which will accelerate in the next few decades. In a recent report, Visa estimated that the stablecoin industry will reach $1.6 trillion by 2030, up from the current $320 billion. Bitwise, on the other hand, estimates that the industry will soon soar to $4 trillion.
Such a move will benefit Circle, which has the second-largest market share in the industry. The most recent results showed that Circle earned $770 million in the fourth quarter, up by 77% from the same period last year. It ended the quarter with $75.3 billion in USDC in circulation, a figure that has grown to $80 billion.
Analysts expect the upcoming numbers to show that its business made $714 million in the first quarter, while its annual revenue will jump by 14% to $3.14 billion.
The company is also working on more initiatives, including Arc, its layer-1 network, and Circle Payments Network (CPN). Its goal is to expand its business to other non-interest businesses.
Still, Circle faces some potential risks, including margin pressure as it continues to invest in growth. There are some concerns that its valuation has become stretched.
CRCL Stock Technical Analysis
The daily chart shows that the Circle share price has performed well over the past few months, as BanklessTimes recently predicted. A closer look shows that the stock has recently formed a double-bottom pattern with a neckline at $110, its highest point on April 17th this year.
The stock is now entering the third phase of the Wyckoff Theory, which is normally the longest and the most bullish. This view will be confirmed if the stock jumps above the key resistance level at $136.45, its March 17 high.
A move above that level will point to more gains, potentially to the 50%Fibonacci retracement level at $175. Soaring above that price will signal more gains to $200.
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