Circle (CRCL) Surges 13.63% in Two-Day Rally as Technical Indicators Signal Strong Bullish Momentum

Circle (CRCL) has surged 11.43% in the most recent session, extending its two-day rally to a cumulative 13.63% gain. This sharp upward move suggests heightened bullish momentum, warranting a deeper technical analysis to assess its sustainability and potential reversal risks.
Candlestick Theory
Recent price action forms a "Bullish Engulfing" pattern, where the second day’s higher low and higher high engulf the prior day’s bearish candle, signaling strong short-term buying pressure. Key support levels include the $75.94 trough (2025-12-01) and the $70.11 low (2025-11-25), while critical resistance lies at $86.59 (2025-12-03 high) and $88.42 (2025-11-13 high).

The price is currently consolidating above the $80 psychological level, which historically acted as a dynamic support/resistance zone (e.g., 2025-11-26 high of $73.29 and 2025-11-19 low of $67.55). A break above $86.59 could target the next Fibonacci extension level at $92.70, while a retest of $75.94 may trigger a short-term correction.
Moving Average Theory
The 50-day moving average (approx. $95.50) and 100-day MA ($103.20) are significantly above the current price, suggesting a medium-term bearish bias. However, the 200-day MA ($126.50) remains well above the 50-day MA, indicating the long-term trend remains downtrend. The recent rally has brought the price closer to the 50-day MA, creating a potential "bull trap" if the 50-day MA fails to cross above the 100-day MA. A sustained close above the 50-day MA would signal a shift in medium-term sentiment, while a breakdown below the 200-day MA would reinforce bearish conviction.
MACD & KDJ Indicators
The MACD histogram has turned positive, with the MACD line (12-period) crossing above the signal line (26-period), confirming short-term bullish momentum. However, the KDJ (Stochastic) indicator shows overbought conditions, with the %K line at 85 and %D at 78, suggesting exhaustion in the rally. A divergence between the MACD and RSI (discussed later) may emerge if the MACD fails to sustain its upward trajectory, hinting at a potential pullback.
Bollinger Bands
The bands have recently expanded following the sharp price surge, reflecting elevated volatility. The current price of $86.29 is near the upper band, a classic overbought condition. A reversal below the 20-day MA (approx. $81.30) would align with the lower Bollinger Band, signaling a probable consolidation phase. The band width (currently 12.3%) suggests that volatility may contract in the near term, increasing the likelihood of a directional breakout.
Volume-Price Relationship
Trading volume has surged to 20.9 million shares in the most recent session, a 28% increase compared to the 16.6 million shares traded two days prior. This volume expansion validates the recent price strength, as higher volume typically accompanies sustained trends. However, if volume tapers off during the next rally leg without a corresponding price advance, it may indicate waning momentum and a higher probability of a correction.
Relative Strength Index (RSI)
The 14-day RSI stands at 72, firmly in overbought territory. Historical data shows that the RSI has frequently triggered sell signals when exceeding 70, with corrections of 10–15% following such readings. However, the RSI’s warning nature must be tempered by the broader trend; in a strong uptrend, overbought conditions can persist for extended periods. A close below 60 would signal weakening momentum, while a rejection at 70–75 may confirm a short-term topping pattern.
Fibonacci Retracement
Applying Fibonacci to the key downtrend from the June 2025 high ($263.45) to the June 2025 low ($104.1), the 61.8% retracement level ($163.75) remains a critical resistance. The current price of $86.29 is well below this level, indicating the retracement is still in early stages. A breakdown below the 38.2% level ($135.25) would reinforce the bearish case, while a rebound above $163.75 could initiate a countertrend rally.

Confluence points emerge between the overbought RSI, Bollinger Band positioning, and KDJ divergence, all suggesting a high probability of a near-term pullback. However, the expanding volume and MACD crossover provide conflicting signals, hinting at a potential continuation of the rally if buyers step in above $86.59. Divergences between the bullish MACD and overbought oscillators warrant close monitoring, as they may signal a trend reversal. Probabilistically, a 30–40% correction to test the $75.94 support appears likely, with a 20% chance of a breakout above $92.70 if volume sustains.