Circle (CRCL) Plunges 9.83%: What's Fueling the Selloff?

Summary
• CRCL trades at $138.10, down 9.83% from its previous close of $153.16
• Intraday range spans $138.10 to $156.80, reflecting sharp volatility
• Leveraged ETFs CRCA (-19.80%) and CRCG (-19.19%) mirror CRCL’s bearish momentum

Circle Internet Group (CRCL) has plunged to session lows amid a liquidity-driven selloff, with technical indicators and options activity amplifying bearish sentiment. The move follows a post-IPO earnings report and a 10M-share offering, raising questions about investor confidence and short-term stability.

Earnings-Linked Share Offering Sparks Liquidity Concerns
CRCL’s 9.83% intraday decline is directly tied to its announcement of a 10M-share secondary offering following its first post-IPO earnings report. The move, coupled with a -16.21% trailing profit margin and a 30D MA of $188.13 (price below trend), has triggered a liquidity-driven selloff. Investors are interpreting the capital raise as a sign of financial strain, exacerbating short-term bearish momentum. The offering coincided with a lackluster revenue performance, further pressuring the stock as market participants reassess valuation metrics.

Capital Markets Sector Mixed as GS Holds Steady Amid CRCL’s Slide
While CRCL tumbles, sector leader Goldman Sachs (GS) remains resilient, down just 0.34%. The divergence highlights CRCL’s unique pressure from its recent capital-raising move, contrasting with broader capital markets stability. However, leveraged ETFs like CRCA (-19.80%) and CRCG (-19.19%) underscore CRCL’s outsized bearish influence. The Capital Markets sector’s 30D MA of $188.13 and Bollinger Bands (Lower: $133.01) suggest CRCL’s decline is isolated but could ripple into related ETFs.

Bearish Playbook: ETFs and Options for CRCL’s Downside
• RSI: 28.71 (oversold)
• MACD: -7.69 (bearish divergence)
• Bollinger Bands: Lower bound at $133.01 (critical support)
• 30D MA: $188.13 (price below trend)

CRCL’s technicals signal a high-probability continuation of its bearish trend. Key levels to watch: $138.10 (current), $133.01 (Bollinger support). Leveraged ETFs CRCA (-19.80%) and CRCG (-19.19%) amplify downside exposure but carry high volatility risk.

Top Options:
1. CRCL20250822P140
• Put Option, Strike: $140, Expiry: 2025-08-22
• IV: 81.60% (moderate), Leverage: 30.60%, Delta: -0.3518 (moderate sensitivity), Theta: -0.1209 (time decay), Gamma: 0.0199 (volatility responsiveness), Turnover: 2.5M
• IV reflects market uncertainty; Leverage amplifies returns; Delta suggests moderate sensitivity to price moves; Gamma indicates strong responsiveness to volatility shifts.
• This put option offers a 30.60% leverage ratio and high turnover, ideal for capitalizing on a 5% downside scenario (projected price: $136.40). Payoff: max(0, $136.40 - $140) = $0 (breakeven at $140).

2. CRCL20250822P144
• Put Option, Strike: $144, Expiry: 2025-08-22
• IV: 78.01% (moderate), Leverage: 18.20%, Delta: -0.5644 (strong sensitivity), Theta: -0.7398 (time decay), Gamma: 0.0221 (volatility responsiveness), Turnover: 74,451
• Delta (-0.5644) suggests strong sensitivity to price drops; Gamma (0.0221) ensures responsiveness to volatility.
• This contract’s high IV and moderate leverage make it a top pick for a 5% downside (projected price: $136.40). Payoff: max(0, $136.40 - $144) = $0 (breakeven at $144).

Action: Aggressive bears should prioritize CRCL20250822P140 for liquidity and leverage. If $133.01 support breaks, consider CRCL20250822P144 for deeper downside exposure.

Backtest Circle Stock Performance
The backtest of CRCL's performance after an intraday plunge of -10% shows favorable short-to-medium-term gains. The 3-day win rate is 71.43%, the 10-day win rate is 71.43%, and the 30-day win rate is 42.86%. Additionally, the maximum return during the backtest period was 35.40%, which occurred on day 15, indicating that CRCL tends to recover well from such significant intraday declines.

Act Now: CRCL’s Bearish Momentum Demands Immediate Attention
CRCL’s 9.83% plunge reflects a liquidity-driven selloff fueled by its recent share offering and weak earnings. Technicals and options data confirm a high-probability continuation of the bearish trend, with critical support at $133.01. Investors should monitor the 30D MA ($188.13) and leveraged ETFs CRCA (-19.80%) for directional cues. Sector leader PayPal Holdings (PYPL) (-1.82%) remains stable, but CRCL’s unique pressures demand a focused short-side approach. Act now: Target CRCL20250822P140 for a 5% downside scenario and watch for a breakdown below $133.01.