CRCL Stock Price Prediction: Will Circle Stock Sink Below $90?
Circle Internet Group (CRCL) lost value as other riskier investments also lost value because of rising U.S. Treasury rates. CRCL stock lost another %3.03% the day before and was trading at $90.80. On Thursday. The 30-year Treasury bond rate increased to a 2004 high.
Will Circle stock defend the $90 support level?
The current business conditions and high inflation increased economic activity. The preliminary S&P Global business activity report showed an increase to 58.4 from the August level of 56.0. March’s high inflation increased price pressures and encouraged the Federal Reserve to continue with its restrictive monetary policy.
The yield on the 10-year Treasury note increased to 5.1%. The yield on the 30-year note increased to 5.444%, the first time it ended above 5.444% since June 2004.
A strong economy and high inflation raised interest rate expectations and increased Treasury rates. The relative value of fixed income securities also increased. Equities and riskier investments, including cryptocurrencies, lost value because of the increasing Treasury rates and flattening yield curve.
Prior to the April 2022 rally, CRCL had a 1-year low of $77.05 on March 7, 2022. From that level, the stock rallied to a 52-week high of $149.46 on April 26. The stock closed at $96.78 on April 29. CRCL declined to $57.90 on June 16, and closed at $63.61 on June 30. Prior to the recent sell off, the stock closed at $95.60 on November 22, 2022.
Bitcoin Testing New Support Levels as Bearish Crypto Trend Persists
Alongside Bitcoin and other Cryptos, Ethereum and XRP have also declined towards key support levels, following market-wide selling pressures. Between 3:00 PM and 6:45 PM EST, the Cryptocurrency market lost roughly 3.15% of its value, and was trading just above $2.83 trillion. Bitcoin was trading below $84,000, and Ethereum was trading around $2,700. XRP was trading at $0.34, which is 7.69% lower than its previous price.
CRCL is affected as the core business of Circle is interlinked with the cryptocurrency ecosystem, and more specifically, with USD Coin (USDC) as a dollar stablecoin.
USD Coin has seen a surge in adoption, and Circle disclosed that USD Coin Transacted Volume (TVT) for Q2 2026 was $73.3 billion, representing a 19% increase from the same period last year. Circle also reported a 5% year over year increase in its Reserves to $668 million, as of Q2 2022.
Circle is expected to be negatively impacted by rising interest rates, especially if the Fed maintains its hawkish policy for an elongated period, since Circle’s primary source of revenue is Reserves Earning Yield.
Hike USDC interest rates and other similar assets to see a positive impact; however, other factors like the circulation of USDC, the reserve costs and the reserve’s return would affect overall performance. In Q2 of 2022, Circle reported an increase in Reserve income, largely due to an increase in the average circulation of USDC, and a decrease in the Reserve’s return rate.
Circle and other companies in the space compete on price, and because the target market is highly price sensitive, margins have been slim to negative, leaving some businesses struggling to survive. Mergers and Acquisitions have occurred as smaller companies have been absorbed. Barring major geopolitical or market moving events, we may see the crypto market stabilize a bit, boosting some of the stronger crypto firms. CRCL has the potential to benefit.
The levels between ~$90 and $91 have acted as dynamic support recently, and have been defended by buyers. A move below $90 would likely test the psychological level of $90 again. A close above $92 would likely bring the ~$95 area and $96 into focus. A stabilization in treasury yields could boost CRCL. Given CRCL is ~54% correlated to Bitcoin, a strong move in Bitcoin to the upside could also boost CRCL.
