Circle (CRCL) Plunges 8.4% Amid Crypto Sector Volatility: What’s Fueling the Selloff?

Summary
• CRCL trades at $120.89, down 8.4% from its previous close of $131.98
• Intraday range spans $120.51 to $131.63, reflecting sharp volatility
• Turnover surges to 8.35 million shares, with a 5.94% turnover rate

Circle’s stock has imploded in after-hours trading, driven by a confluence of sector-wide crypto jitters and regulatory uncertainty. The selloff coincides with a flurry of crypto-related news, including Trump-linked token WLFI’s volatile debut and Solana’s Alpenglow upgrade. With CRCL trading near its 52-week low of $64, the move raises urgent questions about the sustainability of its business model in a tightening regulatory environment.

Regulatory Uncertainty and Sector-Wide Selloff Weigh on Circle
CRCL’s collapse stems from a broader crypto sector selloff rather than company-specific news. The Trump family’s WLFI token, which surged to $0.22 before retreating, has drawn scrutiny for its potential conflicts of interest and regulatory ambiguity. Meanwhile, Coinbase’s equity futures blending Mag 7 stocks with crypto ETFs and Gemini’s $317M IPO plans have heightened market anxiety. These developments, coupled with Bitcoin’s retest of $111K and Ethereum’s mixed performance, have triggered a risk-off sentiment. CRCL’s dynamic PE of -33.52 and its position in a sector facing SEC scrutiny amplify its vulnerability to macro-driven volatility.

Blockchain Sector Under Pressure as WLFI Volatility Spills Over
The blockchain sector is broadly under pressure, with CRCL’s 8.4% drop outpacing Coinbase Global (COIN)’s 0.08% decline. WLFI’s 50% intraday plunge and the SEC’s ongoing debate over crypto asset classification have created a toxic mix. While CRCL’s fall is steeper, the sector’s interconnectedness—evident in Solana’s Alpenglow upgrade and BitMine’s ETH accumulation—highlights systemic risks. Investors are now parsing whether CRCL’s move is a sector correction or a deeper fundamental issue.

Options Playbook: Capitalizing on CRCL’s Volatility with High-Leverage Puts
• RSI: 32.15 (oversold)
• MACD: -12.84 (bearish divergence)
• Bollinger Bands: Lower bound at $117.22 (CRCL near support)
• 30D MA: $159.88 (price 20% below)

CRCL’s technicals scream for bearish positioning. The stock is testing its lower Bollinger Band and sits 20% below its 30D moving average. With RSI in oversold territory and MACD diverging, a continuation of the downtrend is likely. The options chain offers high-leverage puts for aggressive short-term bets. Two top picks:

• CRCL20250912P120 (Put): Strike $120, Expiry 9/12, IV 71.78%, Leverage 21.97%, Delta -0.449, Theta -0.041, Gamma 0.026, Turnover 407,125
- High leverage and moderate delta balance risk/reward. Theta decay (-0.041) and gamma (0.026) suggest sensitivity to price swings. A 5% downside to $114.85 would yield a $6.00 payoff (max $600 per contract).

• CRCL20250912P122 (Put): Strike $122, Expiry 9/12, IV 70.60%, Leverage 18.73%, Delta -0.503, Theta -0.010, Gamma 0.027, Turnover 20,339
- Strong IV and high gamma (0.027) make this ideal for a sharp move. A 5% drop to $114.85 would generate a $7.15 payoff (max $715 per contract).

Aggressive bears should target CRCL20250912P120 for a 5% downside bet. If $117.22 support breaks, consider CRCL20250912P122 for a deeper short.

Backtest Circle Stock Performance

CRCL’s 8.4% Drop: A Buying Opportunity or a Warning Sign?
CRCL’s collapse reflects a sector in turmoil, not a standalone crisis. While the stock trades near its 52-week low, its technicals and options activity suggest further downside risks. Investors should monitor the $117.22 support level and the SEC’s stance on crypto assets. Sector leader Coinbase (COIN) remains relatively stable (-0.08%), but its resilience may not shield CRCL from broader selloffs. For now, short-term bearish options like CRCL20250912P120 offer high-reward potential. Watch for a breakdown below $117.22 or a regulatory catalyst to trigger the next move.