Circle Soars 7.20% Amid Technical Reversal Signals At Key Support

Circle (CRCL) rallied 7.20% in the most recent session, closing at 149.26 amidst significant volatility. This analysis examines key technical signals using the provided historical data.
Candlestick Theory
Recent price action shows high volatility with multiple long-wicked candles. The 8/14 session formed a Hammer pattern (low: 136.4, close: 139.23) after a steep decline, followed by yesterday's bullish engulfing candle (open: 139.25, close: 149.26). This reversal pattern suggests potential exhaustion of the downtrend originating from the 263.45 June peak. Key support emerges near 135-140 (converging with August lows), while resistance is evident at the 156.80-161.50 range marked by recent swing highs.
Moving Average Theory
The 50-day MA (currently near 170) crossed bearishly below the 100-day MA (∼192) in early August, confirming a negative medium-term bias. Price remains well below both averages, though yesterday's bounce occurred near the critical 200-day MA (approximately 144.50). This aligns with historical support from June/July where the 200-day MA contained declines. Continued trading below the 50/100-day MAs maintains bearish pressure unless reclaimed.
MACD & KDJ Indicators
MACD exhibits a bullish divergence: while price made lower lows from 8/11-8/14, the histogram showed diminishing bearish momentum. Concurrently, KDJ's %K (25.1) and %D (21.4) exited oversold territory with a bullish crossover. This dual momentum shift suggests weakening downward pressure. However, both indicators remain in negative territory on daily charts, warranting confirmation of trend reversal.
Bollinger Bands
Price touched the lower Bollinger Band (∼135) on 8/14 before rebounding sharply. Bandwidth expanded significantly during the July-August selloff (volatility spike), but yesterday’s recovery narrowed the bands marginally. A sustained move above the middle band (20-DMA near 152) is needed to signal stabilization. The 156.80 upper band poses immediate resistance.
Volume-Price Relationship
Distribution occurred during the July decline (e.g., 6/24 volume: 68.2M shares, price drop: -15.49%). Recent selling climaxed on 8/12 with 33.5M shares at 161.51-189.92 range. Yesterday’s 7.20% advance occurred on higher volume (23.2M shares vs. 17.9M prior day), suggesting accumulation near support. This volume surge lends credibility to the reversal pattern.
Relative Strength Index (RSI)
14-day RSI rebounded from severely oversold levels (26.3 on 8/14) to 41.2 yesterday. While this exits the oversold zone (<30), it remains below neutral 50 – indicative of lingering bearish momentum. The RSI recovery aligns with price but requires monitoring for continuation signals. Historical overbought conditions (>70) coincided with June peaks.
Fibonacci Retracement
Applying Fibonacci to the June high (263.45) and June low (83.23) reveals confluence zones. The 61.8% retracement (149.50) aligned precisely with yesterday's close at 149.26. Sustained rejection here would confirm this as resistance. Should upside momentum continue, the 50% level (173.34) and 38.2% retracement (197.26) become critical hurdles.
Confluence Notes: The 135-140 support zone combines the 200-day MA, August price lows, and the 78.6% Fibonacci level – a high-probability bounce region validated by yesterday’s reversal. Bearish alignment persists between the death cross (50/100 MA), price below key MAs, and RSI under 50. Key Divergence: Bullish momentum divergences (MACD/KDJ) versus ongoing MA resistance create tension – resolution above 156.80 would confirm reversal strength, while failure below 135 risks cascading selling.