- Circle stock price has formed the risky double-top pattern.
- The USDC supply has dropped to $74 billion from a record high of $84 billion.
- The number of USDC transactions has also continued falling this month.
Circle Internet stock remains under intense pressure today, June 25, reaching its lowest level since February. CRCL has slumped to $69.70, down 50% from its year-high. This trend may continue as key USDC metrics continue falling.
Circle Internet Stock is Falling as Key USDC Metrics Dive
CRCL has been in a strong sell-off this month, and third-party data indicate that the USDC stablecoin is underperforming amid the ongoing crypto winter. The most important data is that USDC’s market capitalization has slumped from $80 billion earlier this year to $74 billion today.
This is a crucial number because of Circle’s business model, where it invests its cash holdings in short-term government bonds. It thrives when bond yields and its assets are in an uptrend, and data show that yields are falling as energy prices slump.
The two-year yield fell to 4.11% from the year-to-date high of 4.22%, and this retreat may continue as the risk of further interest rate hikes eases.
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Meanwhile, additional data suggest that USDC usage is declining during this crypto winter. For example, according to Artemis, the number of USDC transactions has dropped to 162 million this month, down from 252 million in March. Similarly, the number of USDC users has dropped to 996k this month from a peak of 1.2 million in April.
These metrics explain why third-party data show that USDC’s revenue has declined. For example, according to TokenTerminal, this month’s revenue has dropped by 25% to $152 million. It made $203 million last month.
Analysts anticipate some modest revenue growth this year, a notable development, since it is in an industry expected to disrupt payments. This quarter’s revenue is expected to be $728 million, up by 10% YoY. The annual revenue is expected to be $3.07 billion, a 10% YoY growth.
Despite the short-term noise, Circle’s business will likely continue to do well as stablecoin growth continues. Analysts anticipate that the industry will be worth over $6 trillion in the next few years. If USDC’s market share remains at 24%, it would have around $1.4 trillion in assets, fueling its growth.
Circle Stock Price Technical Analysis
In addition to the declining USDC supply, the biggest risk to CRCL stock is its weak technicals. It has formed a highly bearish double-top pattern at $135.71, with a neckline at $84.37, its lowest level on April 9.
The stock has now dropped below the neckline, and the downtrend is being supported by the 50-day moving average. Also, the Relative Strength Index (RSI) has continued falling and is now nearing the oversold level of 30.
Therefore, the path of the least resistance for the stock is downwards, with the next key target to watch being the all-time low of $49. A drop below that level will indicate further downside this year.
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