Circle Internet Group Inc. (NYSE:CRCL) stock fell Friday as Bitcoin (CRYPTO: BTC) declined and investors weighed regulatory uncertainty ahead of the stablecoin issuer’s second-quarter earnings report.
The broader market was higher, with the Nasdaq gaining 0.98% and the S&P 500 rising 0.64%.
Circle is scheduled to report second-quarter results on Aug. 5. Wall Street expects earnings of 19 cents per share, compared with a loss of 43 cents a year earlier. Revenue is projected to increase to $734.7 million from $658.1 million.
Crypto Stocks Hit By Regulatory Concerns
Crypto-linked stocks came under pressure as investors reacted to declining odds that the CLARITY Act will pass during the current Congressional session. Sentiment also weakened after Coinbase Global Inc. (NASDAQ:COIN) reported second-quarter results late Thursday.
JPMorgan analysts led by Nikolaos Panigirtzoglou estimated the probability of the CLARITY Act passing this session at 37% in a report published Wednesday and cited by CoinDesk.
“The longer the approval of the Clarity Act is postponed, the greater the threat to crypto markets from the growth of tokenization and blockchain-based applications eventually being absorbed by incumbent market infrastructure rather than accruing to public crypto networks,” the analysts wrote.
Sen. Cynthia Lummis, R-Wyo., also voiced frustration on X on Wednesday ahead of the Senate’s summer recess. “After nearly 11 months of giving almost everything asked of us, I genuinely don’t know what else my Democrat colleagues need before we act,” Lummis wrote.
Analyst Cuts Target Ahead Of Results
Adding to the cautious sentiment, Bernstein on Wednesday cut its price forecast on Circle by 25%, lowering it to $140 from $190 ahead of the company’s earnings report.
The stock carries a Buy rating with an average price forecast of $109.58. Recent analyst moves include:
- Mizuho: Upgraded to Neutral (Lowers forecast to $45.00) (July 31)
- Raymond James: Initiated with Market Perform (July 22)
- Mizuho: Downgraded to Underperform (Lowers forecast to $50.00) (July 14)
Circle Internet Group Technical Analysis
Circle continues to trade below key moving averages, signaling that the longer-term downtrend remains intact. The stock is 3.9% below its 20-day simple moving average, 20.5% below its 50-day average and more than 30% below both its 100-day and 200-day averages.
The 50-day moving average crossed below the 200-day moving average in June, forming a “death cross,” a bearish technical pattern.
Momentum indicators have improved slightly. The MACD remains above its signal line, suggesting selling pressure has eased. However, analysts note that rallies could continue to face resistance until the stock reclaims key moving averages.
Technical traders are watching resistance near $73 and support around $58.50.
Circle Internet Group Top ETF Exposure
- ARK Innovation ETF (NYSE:ARKK): 3.65% Weight
- ARK Next Generation Internet ETF (NYSE:ARKW): 3.44% Weight
- ARK Blockchain & Fintech Innovation ETF (NYSE:ARKF): 4.65% Weight
Significance: Because CRCL carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
Circle Internet Group Price Action
CRCL Stock Price Activity: Circle Internet Group shares were down 4.38% at $61.42 at the time of publication on Friday, according to Benzinga Pro data.
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