Circle Plunges 6.27% After 17.6% Rally As Resistance Holds At 135

Candlestick Theory
Circle's recent price action reveals critical patterns. The September 11 session formed a robust bullish candle (17.60% gain, closing near the high at 133.7), indicating strong buying momentum. However, this was immediately negated by September 12’s long bearish candle (-6.27% close at 125.32), which engulfed the prior gains and signaled rejection near 135 resistance. Key support emerges at the September 10 low of 113.17 – a critical level where buyers previously stepped in. Resistance is now firmly established between 134.9–136.5 (recent highs and the 200-day MA zone). The rapid reversal pattern near this resistance suggests exhaustion in the short-term uptrend.
Moving Average Theory
Circle exhibits a bearish moving average structure. The 50-day MA (approx. 160) and 100-day MA (approx. 180) slope downward, confirming the intermediate-term downtrend. Most significantly, the price currently trades well below the 200-day MA (approx. 170), reinforcing long-term bearish bias. Recent attempts to breach the 50-day MA (September 11 high at 136.49 failed near this dynamic resistance) were rejected, highlighting its technical importance. The sustained sub-200-day MA positioning and the MAs’ descending order (50<100<200) signal entrenched bearish momentum.
MACD & KDJ Indicators
MACD shows bearish convergence: the histogram turned negative in early September, and the signal line crossed below the MACD line near the 134 resistance. This aligns with weakening momentum. KDJ readings compound concerns – the %K line (21) and %D line (28) are both in oversold territory but lack bullish crossover confirmation. The failure of KDJ to recover despite the September 11 rally signals underlying weakness. While oversold, the absence of bullish divergences or crossups suggests limited reversal impetus.
Bollinger Bands
Circle’s Bollinger Bands reflect volatile compression. The bands contracted sharply in late August (bandwidth narrowing to ~15%), preceding September’s explosive 17.6% rally followed by a -6.27% drop. This exemplifies Bollinger’s "squeeze" principle. Price currently hugs the lower band (close at 125.32), indicating sustained selling pressure. Failure to reclaim the midline (approx. 130) reinforces bearish control. Band expansion during the September 12 selloff confirms renewed downside momentum.
Volume-Price Relationship
Volume patterns validate bearish reversals. The September 11 rally occurred on elevated volume (23.6M shares vs. 10-day avg ~12M), suggesting climactic buying. However, the subsequent 6.27% drop on even higher volume (15.2M shares) signals distribution. Notably, downside days since September 5 consistently show higher volume than upside days, confirming selloff conviction. The absence of volume confirmation during recovery attempts (e.g., September 9 +4.92% on below-avg volume) further undermines bullish sustainability.
Relative Strength Index (RSI)
Circle’s 14-day RSI (calculated using average gain/loss) sits at 38.3, nearing oversold territory (<30) but lacking reversal confirmation. The indicator failed to breach 50 during recent rallies, demonstrating weak momentum. While approaching oversold, the lack of bullish divergence (price made lower highs in September while RSI flatlined) diminishes predictive weight. Historically, Circle has sustained RSI readings below 40 for extended periods during downtrends (e.g., July-August), reducing reliability of oversold signals alone.
Fibonacci Retracement
Applying Fibonacci to Circle’s dominant downtrend (high: 263.45 on 2025-06-23; low: 104.26 on 2025-06-12), key levels emerge. The recent rally peaked precisely at the 38.2% retracement (134.9) before reversing. This level now acts as primary resistance. Confluence exists here with the 200-day MA and September 12 high. Support appears at the 23.6% level (122.5), which aligns with August consolidation lows. A breakdown below 113.17 (near the 0% extension) would reaffirm the downtrend. The rejection at 38.2% retracement underscores persistent bearish pressure.