Circle Surges 16% to $149.72 on Bullish Engulfing Pattern as Volume Spikes

Candlestick Theory
Circle's price action culminated in a robust bullish engulfing candle on 2025-10-02, surging 16.04% from $129.03 to $149.72 on significantly elevated volume (19M shares vs. prior 9M). This pattern invalidates the preceding doji formation near $129–$130, signaling strong buying pressure and potentially marking the $126–$130 zone as major support. The session breached the recent resistance at $137.80 (2025-09-29 high), establishing it as interim support. A critical resistance now lies near $152.05 (current session's high), with psychological resistance at $150 likely to be tested.
Moving Average Theory
The 50-day MA (~$148) hovers above the 100-day MA (~$162), reflecting persistent intermediate-term bearish pressure. However, Circle closed above the 50-day MA for the first time since early August following the 10-02 surge, suggesting potential short-term trend reversal. The 200-day MA (~$157) remains a formidable overhead resistance. A sustained break above the 50-day MA would be necessary to validate bullish momentum, while failure could see retracement toward the 100-day MA.
MACD & KDJ Indicators
The MACD histogram transitioned into positive territory on 10-02, with the signal line poised for a bullish crossover—hinting at emerging upward momentum. However, the KDJ indicator shows overbought conditions (K:83, D:77, J:95), implying near-term exhaustion risk. Divergence is noted: MACD's nascent bullishness contrasts with KDJ’s warning of overextension. This suggests upside may be capped in the immediate term unless volume sustains the breakout.
Bollinger Bands
Circle’s price pierced the upper Bollinger Band ($143) during the 10-02 surge, indicating heightened volatility and potential overbought extremes. Bandwidth expanded sharply after prolonged contraction (September volatility squeeze), validating the breakout. While such breaches often precede continuations, a mean-reversion pullback toward the 20-period moving average (mid-band, ~$135) is plausible, especially given overbought oscillators. The lower band at $127 aligns with key candlestick support.
Volume-Price Relationship
The 10-02 rally occurred on the highest volume since mid-July 2025 (19M shares vs. 3-month avg ~11M), confirming conviction behind the breakout. However, volume divergence emerged in September: price declines (e.g., 9-25 to 9-30) featured relatively lower volume, suggesting limited selling pressure. Sustained high volume above $140 is critical to uphold bullish momentum; failure may signal distribution.
Relative Strength Index (RSI)
The 14-day RSI surged to 71 following the 16% gain, entering overbought territory for the first time since June. Historically, Circle has struggled to maintain RSI >70 for extended periods during 2025 (e.g., reversals at June and August peaks). While not an outright sell signal, it cautions against chasing momentum near-term. A consolidation phase to relieve overbought conditions appears probable.
Fibonacci Retracement
Applying Fib levels to the June-September decline (peak: $263.45 on 06-23; trough: $105.91 on 09-10): the 10-02 close at $149.72 sits precisely at the 61.8% retracement ($149.40). This confluence of price resistance and psychological $150 suggests significant supply may emerge here. A decisive break above $150 would target the 78.6% level ($167.50). Conversely, the 50% retracement ($135.20) now aligns with the breakout point and Bollinger mid-band, offering robust support.
Confluence & Divergence Summary
Confluent bullish signals include: (a) volume-confirmed breakout above $137.80, (b) MACD bullish crossover, and (c) Bollinger Band expansion. However, bearish divergences warrant caution: (a) RSI/KDJ overbought signals conflict with MACD’s early-stage momentum, and (b) the Fibonacci 61.8% barrier coincides with technical and psychological resistance. The moving averages remain bearishly stacked long-term. While Circle displays clear short-term strength, the confluence of resistance near $150–$152.05 and overbought oscillators may trigger profit-taking. A consolidation between $135–$150 appears likely before the next significant directional move.