Circle Stock Plunges 24.61% In Two Days As Technical Indicators Flash Bearish Signals

Circle (CRCL) stock has experienced significant bearish pressure in the recent trading session, declining 10.79% to close at 198.62, marking a two-day cumulative drop of 24.61%. This sharp downturn follows heightened volatility in the preceding weeks, necessitating a multi-indicator technical assessment.
Candlestick Theory
Recent sessions reveal critical bearish patterns. The June 23rd candle formed a Shooting Star with a long upper wick (high: 298.99, close: 263.45), signaling rejection at psychological resistance near 300. Subsequent days confirmed bearish momentum with two large-bodied red candles (June 24th: -15.49%, June 25th: -10.79%), indicating sustained selling pressure. Immediate support rests at 198 (June 25th low), while resistance emerges at 227.54 (June 25th high) and the 265-300 zone rejected on June 23rd–24th. Breakdown below 198 would expose next support at 191.
Moving Average Theory
Short-term moving averages (5-day: 224.92, 10-day: 178.21) exhibit bearish divergence. The current price (198.62) has breached the 5-day MA and is testing the 10-day MA. While the longer 14-day MA (156.76) remains below the price, the abrupt drop below the 5-day MA suggests near-term trend weakness. A sustained break below the 10-day MA would signal potential trend reversal, with the 14-day MA acting as final dynamic support.
MACD & KDJ Indicators
MACD (using adjusted 6/12/9 periods due to data limitations) displays bearish momentum. The histogram turned negative on June 24th, accelerating on June 25th. KDJ analysis shows %K (48.46) crossing below %D in overbought territory (>80) on June 23rd, generating a sell signal. This divergence between weakening MACD and the overbought KDJ peak on June 23rd forewarned the subsequent 24% collapse, though stochastic values now approach neutral (48.46).
Bollinger Bands
Volatility expansion is evident as bandwidth widened during the June 23rd-25th swing. The price has plunged from the upper band (281.01) to test the middle band (178.21), reflecting increased bearish conviction. While not yet tagging the lower band (75.41), the velocity of descent suggests potential overshoot if selling persists. The +2σ band contraction preceding the drop indicated a coiled volatility setup, now resolved bearishly.
Volume-Price Relationship
Volume patterns validate bearish momentum. The June 23rd peak (97.8M shares) coincided with the Shooting Star, suggesting distribution. Though volume declined sequentially during the sell-off (June 24th: 68.2M, June 25th: 48.8M), it remained above the 30-day average. This divergence—declining volume during capitulation—may indicate weakening bearish pressure, but requires confirmation with reversal candles near supports.
Relative Strength Index (RSI)
The 14-day RSI (69.98) approaches overbought territory (>70) despite the price drop, reflecting extreme momentum from the prior rally. Historically unreliable as a standalone signal in volatile moves, this divergence—where price declines but RSI remains elevated—warns of residual downside risk. A decisive break below 30 would signal oversold conditions, but current values suggest normalization may be incomplete.
Fibonacci Retracement
Using the swing low (83.23 on June 5th) and high (298.99 on June 23rd), key retracement levels emerge at 248.09 (23.6%), 216.57 (38.2%), 191.11 (50%), 165.65 (61.8%), and 129.4 (78.6%). The price has breached the 38.2% level (216.57), with the 50% retracement (191.11) now acting as critical support. Confluence exists here with the June 25th low (198), where breakdown would target 165–167.
Confluence & Divergence Synthesis
Strong confluence appears at 190–200, combining Fibonacci 50% retracement, June 25th low, and 10-day MA. However, bearish momentum dominates across oscillators (MACD, KDJ) and volume studies. Critical divergence exists in RSI remaining near overbought levels despite price collapse, suggesting the indicator may lag during high-volatility events. Should 190 support fail, the 61.8% Fibonacci level at 165–166 offers the next substantial barrier.