- Circle stock price has moved sideways in the past few days.
- The company will publish its financial results on Monday.
- CRCL has formed a double-bottom pattern pointing to more gains.
Circle stock price was flat this week, despite the ongoing progress on the closely-watched CLARITY Act. CRCL ended the week at $113.67, up by nearly 130% from its lowest point this year. This consolidation may be a calm before the storm as the company prepares to publish its third earnings as a publicly traded firm.
Circle Stock Waits for Earnings
Circle Internet Financial will be the top crypto company to watch on Monday as it releases its earnings. These numbers are expected to show whether its growth momentum continued in the first quarter.
Circle makes most of its revenue from USDC, the biggest regulated stablecoin in the world. It invests these tokens in short-term US government bonds, which are yielding about 3.8%.
USDC started the year with $76 billion and ended Q1 with $77 billion in assets. Last year, it started the quarter with $45 billion and ended it with around $60 billion.
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The company does not benefit from all these funds because of its distribution deal with Coinbase. Coinbase invests all the funds – around 25% – it holds in its platform and keeps the yield.
Therefore, we can estimate that Circle invested about $57 billion, which would bring its quarterly revenue to over $725 million. It made $578 million in the same period last year.
In addition to its revenue growth, traders will watch other key things in its report. Specifically, they will focus on its margins, which some analysts will remain under pressure as the company invests in growth.
Traders will also focus on its other products. For example, they will look at the Circle Payment Network (CPN), which it launched last year. CPN aims to become a major disruptor in finance, helping companies move money globally faster and cheaper. It had 55 institutions in Q4, with 74 others being reviewed. A surge in this aspect will be bullish for the company as it will help it expand its non-interest income.
Circle stock will also react to any progress made regarding the CLARITY Act. A markup and eventual passing of the bill will be bullish as it will make include stablecoin yield on their USDC tokens.
CRCL Stock Price Technical Analysis
Circle stock chart | Source: TradingView
The daily chart reveals that the Circle stock soared after its last earnings report in February. It made an up-gap and continued the rally, eventually reaching a high of $136 in March. Since then, the company has been in a narrow range and ended the week at $113.
It has moved above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator. There are also signs that it has formed a small double-bottom pattern at $86 and a neckline at $110. A double-bottom is a popular bullish reversal sign in technical analysis.
Therefore, the stock will likely jump and move to the key resistance at $136. A move above that level will point to more gains, potentially to the psychological point at $150.
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