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

Circle Internet Group (CRCL) stock plummeted nearly 20% following news that a draft of the CLARITY for Payment Stablecoins Act introduced a ban on passive yield for stablecoin balances, impacting its USD Coin (USDC) business. Despite the sharp correction, technical analysis suggests the drop might be a bear trap. The Relative Strength Index (RSI) shows a bullish divergence, with the price making a lower low while the RSI made a higher low, signaling potential reversal, provided the $98 level holds. Options positioning has shifted more bearish, but the overall put-call ratio remains below 1.0, and Chaikin Money Flow (CMF) indicates continued institutional accumulation during the price drop. Furthermore, technical patterns, including an inverse head-and-shoulders formation, suggest a potential breakout target between $141 and $152, with Fibonacci extensions pointing toward a 130% move to $326. ARK Invest bought $16 million of CRCL during the dip, reinforcing the view that the regulatory reaction was overdone.

(Source：BeInCrypto)