Top Crypto Analyst Explains Why the Circle Stock Price is Pumping

Key Insights

• A top crypto analyst has explained why Circle’s stock price is rising.
• He pointed to the potential Federal Reserve interest rate hikes.
• USDC volume has jumped above that of USDT.

Circle stock price is experiencing a major turnaround after months of falling. It rebounded from the all-time low of $5o in February to $130 today.

This surge has happened even as the US stock market has retreated, with the Dow Jones and other top indices erasing their year-to-date gains.

Circle Stock Has Jumped Because of the Federal Reserve

In an X post, a popular analyst explains the top reasons why CRCL stock has rebounded over the past few weeks.

One of the reasons is that the ongoing Iran war has fueled inflation in the United States and other countries, with crude oil, natural gas, fertilizer, and transport costs soaring.

Analyst explains Circle stock jump | Source: X

As a result, analysts believe that inflation will continue rising in the near term, with some experts expecting the headline Consumer Price Index (CPI) rising to 3% and above.

Therefore, the Federal Reserve will likely maintain high interest rates for longer than expected. Indeed, some analysts expect that the bank’s next move will be an increase.

Higher interest rates are bullish for Circle and other stablecoin issuers because they make most of their money investing in short-term government bonds, which are typically impacted by Federal Reserve interest rates. Data shows that these bond yields have jumped recently, with the two-year rising to 3.86%.

The recent short-term bond yield jumps have coincided with a surge in USDC volume, which has jumped from $70 billion earlier this month to $81 billion today.

USDC Has Flipped USDT In Terms of Volume

Circle stock price has also jumped because of the ongoing adoption of the USDC stablecoin, which has helped it to overtake USDT, the biggest stablecoin in the industry.

Data shows that the adjusted transaction volume of the USDC token in the last 30 days stood at over $6.3 trillion, with most of it being in centralized exchanges. In the same period, USDT, which has over $184 billion in assets, processed over $1.2 trillion.

This growth has led to the conviction that it will continue growing in the coming years, especially after the passage of the GENIUS Act, which made USDT ineligible in the United States. USAT, the stablecoin launched by Tether in accordance with the GENIUS Act, has not gained traction, with a market capitalization of $20 million.

USDC ‘s demand will be boosted by the ongoing growth of AI agents. Anthony predicts that most AI agents will use USDC stablecoin, a move that will lead to more supply.

Meanwhile, the company has added assets in an era when Bitcoin and most cryptocurrencies have retreated. Bitcoin remains down by over 20% from its all-time high, while other tokens have fared even worse.

The analyst also pointed to the recent earnings, which were much higher than expected. Its revenue jumped 77% in the fourth quarter, and the company’s guidance exceeded analysts’ expectations.

The estimate is that its annual revenue will jump by 14% this year to $3.13 billion. They also expect that its revenue will jump by 40% next year to $4.34 billion.

Circle Stock Price Forecast: Technical Analysis

CRCL share price has rebounded in the past few weeks, moving from $48 in February to the current $130. It has moved to the upper side of the Donchian Channel, a sign that the bullish trend is accelerating.

The stock is slowly nearing the 38.2% Fibonacci Retracement level, while the Average Directional Index (ADX) has jumped to a record high of 51. This jump is a signal that the rally is accelerating.

CRCL stock chart  | Source: TradingView

Therefore, the stock will likely keep rising as buyers target the next important resistance level at $175. This price is along the 50% Fibonacci Retracement level and is about 40% above the current level. Crossing above that price will push it to the psychological level of $200.

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