Circle (CRCL) Plummets 5.86% Amid ProShares' 2x Leveraged ETF Launch: Is This a Buying Opportunity or a Short-Squeeze Setup?

Summary
• CRCL drops to $152.22, down 5.86% from its $161.71 close
• ProShares launches Ultra CRCL (CRCA), a 2x leveraged ETF tracking CRCL
• Intraday range of $151.10–$169.92 highlights volatile session
• Options chain sees heavy activity in August 15th $145–$150 puts

Circle Internet Group (CRCL) is under pressure as its stock plunges nearly 6% intraday, driven by the debut of ProShares’ 2x leveraged ETF (CRCA). The sharp decline follows a 400% post-IPO surge, now correcting amid regulatory clarity and a new financial product amplifying exposure to the stablecoin giant. With options volatility spiking and technical indicators flashing oversold conditions, traders are scrambling to position for the next move.

ProShares' 2x ETF Launch Sparks Profit-Taking and Short-Side Momentum
The 5.86% intraday drop in CRCL is directly tied to ProShares’ launch of the Ultra CRCL (CRCA) ETF, which aims to deliver 2x daily returns on the stock. While the ETF’s debut attracted speculative buying, it also triggered profit-taking from investors who had bought in during CRCL’s post-IPO rally. The 2x leverage structure amplifies both gains and losses, creating a self-fulfilling dynamic where leveraged longs unwind positions as volatility rises. Additionally, the options market reflects bearish sentiment, with heavy volume in August 15th $145–$150 puts, suggesting traders are hedging against further declines.

Capital Markets Sector Mixed as Goldman Sachs (GS) Trails 0.6% Amid Broader Volatility
The Capital Markets sector remains fragmented, with CRCL’s sharp decline contrasting against Goldman Sachs (GS)’s modest 0.6% intraday dip. While CRCL’s move is product-specific—driven by the ProShares ETF launch—GS’s underperformance reflects broader market jitters ahead of the August 15th expiration of key macroeconomic data. The sector’s lack of a unified trend underscores the idiosyncratic nature of CRCL’s volatility, which is more tied to its stablecoin exposure and leveraged product dynamics than systemic capital markets pressures.

Options and ETF Playbook: Navigating CRCL’s Volatility with High-Gamma Puts and CRCA Exposure
• RSI: 18.06 (oversold)
• MACD: -3.89 (bearish divergence)
• Bollinger Bands: Lower band at $149.13 (CRCL near support)
• 30D MA: $194.03 (price 23% below)

CRCL’s technicals suggest a short-term oversold condition, but the bearish momentum is reinforced by the 2x leveraged ETF’s structural impact. For traders, the key levels to watch are the $149.13 Bollinger lower band and the $145–$150 put-heavy zone. The ProShares Ultra CRCL ETF (CRCA) offers a leveraged play on CRCL’s directional moves, but its daily reset nature makes it unsuitable for long-term holding.

Top Options Picks:
• CRCL20250815P145 (Put, $145 strike, Aug 15 expiry):
- IV: 90.51% (high volatility)
- Leverage Ratio: 28.87% (moderate)
- Delta: -0.3388 (moderate sensitivity)
- Theta: -0.1731 (significant time decay)
- Gamma: 0.0169 (high sensitivity to price swings)
- Turnover: 248,098 (liquid)
- Payoff (5% down): $10.12 per contract (max gain if CRCL drops to $144.11)
- Why it stands out: High gamma and IV make this put ideal for a sharp decline, with liquidity to enter/exit.

• CRCL20250815P150 (Put, $150 strike, Aug 15 expiry):
- IV: 89.83% (high volatility)
- Leverage Ratio: 20.56% (moderate)
- Delta: -0.4296 (strong sensitivity)
- Theta: -0.1271 (moderate time decay)
- Gamma: 0.0183 (high sensitivity to price swings)
- Turnover: 1,556,876 (extremely liquid)
- Payoff (5% down): $7.91 per contract (max gain if CRCL drops to $144.11)
- Why it stands out: High turnover and gamma make this a robust short-term bearish play with defined risk.

Hook: If CRCL breaks below $149.13, CRCL20250815P145 offers a high-gamma, high-IV short-side bet. Aggressive bulls may consider CRCA for leveraged exposure, but watch for a breakdown into the $145–$150 put-heavy zone.

Backtest Circle Stock Performance
The backtest of CRCL's performance after a -6% intraday plunge shows a significant positive outcome. The strategy achieved a 106.98% return, vastly outperforming the benchmark return of 3.83%. The excess return was 103.15%, indicating that the strategy not only recovered from the plunge but also gained substantial ground relative to the benchmark. The CAGR (Compound Annual Growth Rate) was an impressive 618012.14%, which is a testament to the strategy's compounding effectiveness. Although the maximum drawdown was 272.12%, the Sharpe ratio of 2271.11 suggests that the risk-adjusted return was highly favorable, making the strategy a robust choice for investors seeking both growth and stability.

CRCL at Pivotal Intraday Inflection: Short-Term Bearish Setup or Oversold Rebound?
CRCL’s 5.86% intraday drop, fueled by the ProShares 2x ETF launch and bearish options flow, signals a critical juncture. While technical indicators like RSI (18.06) and MACD (-3.89) suggest oversold conditions, the structural impact of CRCA and heavy put volume in the $145–$150 range favor a short-term bearish bias. Traders should monitor the $149.13 Bollinger lower band and the $145–$150 support cluster. For context, the sector leader Goldman Sachs (GS) is down 0.6%, reflecting broader market caution. Action: Consider CRCL20250815P145 for a high-gamma short play if the $149.13 level breaks. Long-term investors may find value in CRCL’s 52W low of $64, but near-term volatility remains elevated.