Despite USDC's 62% Dominance...Why Did Circle (CRCL) Stock Price Collapse?

▲ Circle (CRCL), Dollar (USD)/ChatGPT generated image

While stablecoin trading volume decreased by $400 billion in a month, and USDC captured 62% of the market, Circle (CRCL) stock price recorded its largest monthly decline ever.

According to cryptocurrency media CoinGeape on August 3 (local time), Circle's stock price closed at $62 on July 31, down 2.54%. In July, it recorded the largest monthly decline since its listing. Although USDC ranked first in stablecoin trading volume, it could not prevent the stock's weakness.

According to Visa data, the total stablecoin trading volume in July was tallied at $1.36 trillion. This is a decrease of approximately $400 billion from June's $1.77 trillion. USDC trading volume was $849 billion, accounting for 62% of the total. USDT followed with $502 billion. USDC's trading volume also decreased from its all-time high of $1.2 trillion in June.

Circle received approval from the Office of the Comptroller of the Currency (OCC) to establish Circle National Trust. ARK Invest, led by Cathie Wood, purchased over $37 million worth of Circle stock in July. On July 31, an additional $6.83 million worth of shares were acquired.

Technical indicators pointed to a bearish trend. The Relative Strength Index (RSI) was 43 and has not exceeded 50 since May 29. For a short-term trend reversal, the stock must surpass the 20-day exponential moving average (EMA) of $65. The subsequent target is the 50-day EMA at $75, and the long-term uptrend confirmation level is the 200-day EMA at $99.

TD Cowen issued a 'Buy' rating for Circle with a target price of $82. It projected that USDC supply would increase by 31% annually until 2030. Circle's revenue for the next 12 months is expected to grow by 51% to $2.86 billion. Circle is scheduled to announce its Q2 earnings before the market opens on August 5, with market expectations of $744 million in revenue and $0.18 earnings per share.

[Article Key Summary]

-Total stablecoin trading volume in July recorded $1.36 trillion, a decrease of approximately $400 billion from the previous month.

-USDC surpassed USDT with a trading volume of $849 billion and a 62% share, but Circle's stock price recorded its largest monthly decline ever in July.

-TD Cowen issued a 'Buy' rating for Circle with a target price of $82, citing the expected expansion of USDC supply.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*