Circle Stock Plummets 20%: Will Bullish Signs Lead to a Major Recovery?

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CLARITY Act Yield Ban Rattles Circle Stock, but a 130% Pattern Target Survives

Shares of Circle Internet Group (NYSE: CRCL) fell nearly 20% on March 24th. This drop happened after a proposed new law, the CLARITY for Payment Stablecoins Act, included a plan to prohibit earning rewards (yield) on stablecoin holdings. Circle is the company behind USD Coin (USDC), which is the second-largest stablecoin available.

The recent market decline wiped out billions of dollars in value. But, analyzing daily trading patterns and where institutional investors are moving their money suggests the situation might not be as negative as it first appears.

Bullish Divergence Flashes, Keeping Hopes Alive

Circle’s stock price began to fall on March 17th. While the proposed CLARITY Act may have contributed to a 28% drop from its recent high, most of that decline actually occurred yesterday.

This suggests the market may have already anticipated and factored in potential problems with the CLARITY Act.

It’s not surprising to see this happening, as reports have consistently shown that earning yield on passive stablecoin balances wasn’t feasible and likely wouldn’t be included in the final agreement. The recent news about the Tether audit may also be contributing to the current downturn.

— Eleanor Terrett (@EleanorTerrett) March 24, 2026

Even though we’ve seen a recent correction, I’m finding a potentially positive signal in the Relative Strength Index, or RSI. Looking at the price action between September 8, 2025, and March 24, 2026, I noticed the price made a lower low, but the RSI actually made a higher low. This is a classic bullish divergence, and historically, it often suggests a trend reversal is coming.

Okay, so here’s how I’m looking at things as a crypto investor. This potential bullish signal isn’t a sure thing just yet. If the price drops and closes below $98 today, that would ruin the setup, and I’d have to reconsider. But if we can *hold* above $98 for the rest of the day, that confirms the signal, and I’ll be betting on a price increase. Basically, $98 is the key level to watch right now.

While the Relative Strength Index suggests prices might start to bounce back, a look at options trading reveals a more complex picture of what traders are actually expecting.

Options Positioning Shifts Bearish, but CMF Says Hold

The put-call ratio, a way to gauge market sentiment by comparing the number of bets that a stock will fall (puts) to those that it will rise (calls), has changed since Circle announced its earnings. On February 25th, when Circle reported its fourth-quarter results at $83 per share, there were significantly more call options being traded and held than put options – indicating a generally optimistic, or bullish, outlook. The ratio of put volume was 0.58, and the ratio of open interest was 0.70.

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By March 24th, with CRCL trading at $101, trading activity and open interest had both increased significantly, reaching 0.66 and 0.84 respectively. More traders were opening put options and maintaining those positions, suggesting that some are either protecting their investments against potential losses or anticipating that the price won’t recover.

Despite a growing preference for bearish options, call options still dominate put options overall. While sentiment is becoming more negative, it hasn’t yet shifted completely.

Chaikin Money Flow (CMF) suggests strong buying by large investors, supporting the idea that the stock will rise. Even though the price of CRCL stock fell between October 29, 2025, and March 23, 2026, CMF consistently increased, remaining positive even during a 20% price drop. This difference between price and CMF indicates that major investors were still buying the stock as the price declined, which often leads to a significant price increase soon after.

The current market situation looks more like a ‘bear trap’ – a temporary dip meant to trick investors – rather than the beginning of a long-term downturn. This is based on the idea that worried retail investors are selling, while larger institutional investors seem confident. However, if the Commodity Flow Index (CMF) falls below zero, this positive signal could disappear.

Circle Stock Forecast and the $141 Breakout Window

Recent selling has created a potential inverse head-and-shoulders pattern for CRCL, though the pattern’s ‘neckline’ is quite steep. For this pattern to be confirmed, the price would need to increase by about 40% to 50% from where it is now, meaning a breakout could occur between $141 and $152.

As an analyst, I’m noting that the $152 price point for Circle stock also happens to match the new price target recently set by Clear Street, a New York-based investment banking firm. It’s interesting to see that alignment.

$CRCL Circle Internet Group Price Target Raised to $152.00/Share From $136.00 by Clear Street

— 𝒰𝓂𝒷𝒾𝓈𝒶𝓂 (@Umbisam) March 19, 2026

While it seems like a significant jump, the price is showing positive momentum. If the key resistance level is broken, projections suggest initial gains to $185, then potentially $239, and ultimately $326. This $326 target represents an expected increase of over 130%.

On March 24th, ARK Invest purchased around $16 million of CRCL stock during a price drop, suggesting they believe the market overreacted to the CLARITY Act and see potential in the stock.

ARK Invest recently purchased $16 million worth of CRCL stock after its price fell about 20%. This drop was likely caused by concerns about new regulations for stablecoins, which could potentially limit how much yield they can offer.

— The Wolf Of All Streets (@scottmelker) March 25, 2026

Even though the way rewards are distributed might need to be changed, the current system generally supports well-regulated stablecoin companies like Circle more than those operating without regulation.

The price needs to stay above $98. If it falls below that, it could signal a weakening trend and invalidate a potential bullish pattern. If the price drops further, $71 will act as the next support level, but the pattern will only be completely broken if it falls below $49.

As of now, $98 separates a bear trap recovery toward $152 from a structural breakdown toward $71.

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2026-03-25 18:14