Circle Stock Plunges 9% Below Key Moving Average As Bearish Momentum Intensifies

Candlestick Theory
Recent sessions display a pronounced bearish momentum for Circle. The latest three candles form a descending trio with progressively lower closes (202.41 → 193.08 → 185.36), confirming strong selling pressure. A critical resistance level emerges near $202–203, aligning with the July 23 peak, while support is tested at $183.91 (July 28 low). The July 16–18 period previously showed bullish reversal potential (long lower wicks near $220–222), but subsequent breakdowns invalidate this. The current bearish pattern suggests vulnerability to further downside if $183 support fails.
Moving Average Theory
Short-term moving averages signal entrenched downtrend dynamics. The 10-day MA (approximating short-term) at $193.50 converges below the 20-day MA (medium-term proxy) at $204.80, reinforcing bearish alignment. Price remains firmly under both MAs, with the July 28 close ($185.36) 9% below the 20-day MA. This configuration—combined with widening separation between averages—indicates accelerating bearish momentum. No golden cross or support inflection is evident in the available data.
MACD & KDJ Indicators
MACD (12,26,9) shows sustained bearishness, with the histogram deeply negative and both signal/MACD lines diverging southward below zero. KDJ readings amplify oversold conditions: the July 28 K-value (11.2) and D-value (17.8) plunge below 20. While KDJ’s extreme oversold stance signals potential technical rebound risk, MACD’s unrelenting negative trajectory and expanding histogram bars suggest downward inertia dominates. Divergence emerges as KDJ hints at exhaustion while MACD shows no bullish crossover confirmation.
Bollinger Bands
Volatility expansion is evident, with bandwidth widening 18% since July 22 as Circle’s decline accelerated. Price now hugs the lower band ($182–188), typically indicative of sustained bearish momentum. The July 24–28 consolidation near the lower band lacks upward recoil, diminishing reversal prospects. Notably, the prior high-volatility episode on June 24–27 ($175–223 range) established a volatility anchor; a retest of that lower band zone ($175-180) appears increasingly probable.
Volume-Price Relationship
Bearish volume confirmation remains pronounced. The three-day sell-off (July 24–28) occurred on elevated volume (+15% vs 20-day avg), with July 22’s 8.23% collapse seeing peak volume (18.5M shares). Distribution patterns dominate: rallies (e.g., July 14 +9.27%, July 16 +19.39%) showed weaker volume than subsequent declines. This persistent down-volume bias signals conviction among sellers, undermining reversal scenarios absent volume-supported accumulation.
Relative Strength Index (RSI)
RSI(14) at 28.6 reflects deeply oversold territory. Historically, Circle’s RSI reversals from <30 catalyzed rebounds (e.g., June 12 at 29.5 preceded 25% rally). However, the current oversold extreme lacks bullish divergence; RSI declines have paralleled price drops since July 22. While statistically stretched, similar conditions persisted during June’s extended downturn, warranting caution against premature reversal assumptions. RSI’s current reading may imply capitulation risk rather than immediate recovery.
Fibonacci Retracement
Applying Fib to Circle’s June–July swing (trough $83.23 on June 5, peak $263.45 on June 23) reveals critical retracement anchors. The 50% level ($173.34) aligns with June’s volatility low ($175.6). The 61.8% retracement ($156.55) remains untested but becomes secondary support if $173 fails. Current price ($185.36) breaches the 38.2% level ($192.70), transforming it into resistance. Confluence exists at $173–175, combining Fib 50%, psychological support, and June 27’s swing low.
Confluence & Divergence Synthesis
Critical bearish confluence clusters near $173–175, merging Bollinger support, Fib 50% retracement, and June’s base. Sustained closes below $183 support may trigger accelerated targeting of this zone. Divergences exist between oversold oscillators (RSI/KDJ) and unabated bearish momentum (MACD/volume), highlighting tension between technical exhaustion and dominant trend dynamics. Absent bullish volume or reversal patterns, Circle’s path of least resistance favors continued downside, with high-probability reversal signals requiring close monitoring of $173 support and MACD convergence.