Circle shares hit by weak charts, shrinking USDC and lower yields

Circle Internet Group shares have fallen from a May high of $138.50 to $79.72, the lowest level since March 2. Chart patterns show a double-top with a neckline near $79; the measured move from that pattern points to a $28 target if the neckline breaks. The price sits below its 50-day exponential moving average and the Relative Strength Index is near 37. A tight horizontal consolidation after a sharp decline resembles a bearish flag on recent charts.

Data show USDC supply has declined in recent months. CoinMarketCap lists USDC supply down from about $79.3 billion in March to roughly $74 billion, while Artemis reports supply near $76 billion. Circle holds dollar equivalents backing USDC in short-term U.S. government securities; a smaller token supply reduces the amount of reserves the company can invest and the potential interest income from those holdings. At the same time, Artemis data indicate USDC transaction volume rose about 15% over the past 30 days to more than $2.6 trillion and active addresses increased to about 16 million.

U.S. Treasury yields have eased in recent weeks. The two-year yield moved from about 4.20% earlier this month to around 4.05%, and the five-year yield declined from a year-to-date high near 4.35% to about 4.155%. Lower short-term yields reduce the return on the government securities that back USDC and narrow the margin available to issuers who invest those reserves. Market moves followed a memorandum of understanding between the U.S. and Iran that is expected to reopen the Strait of Hormuz; crude oil and natural gas prices pulled back alongside an easing in yields.

Circle has also expanded into a new layer-1 blockchain, Arc, which raised $222 million from investors including BlackRock and Apollo. New chains have experienced volatile token demand and falls in total value locked on other networks. If Arc’s token and related trading see weak demand, token prices and total value locked could decline.

Technical analysts identify a previous all-time low near $50 as a key support level. A sustained drop below that level would align with a deeper breakdown under the double-top measured-move framework.

Background: Circle issues the USDC dollar-pegged stablecoin and holds customer dollar equivalents in U.S. government securities. The company’s revenue is primarily generated from income on those reserve investments rather than transaction fees.