Circle Stock Forecast as It Invests in OKX Amid Rising US Treasury Yields

Circle stock has slumped in the past few days, moving from last month’s high of $103.23 to the current $83. Despite this weakness, the stock will likely bounce back after investing OKX and as US government bond yields continue rising. It will also benefit from the ongoing Arc Blockchain.

Circle Internet Has Invested in OKX

A potential catalyst for Circle Internet is its investment in OKX, one of the world’s largest crypto exchanges. Other participants in this fundraising were Ripple Labs and Standard Chartered. A few months ago, the company raised $200 million from the New York Stock Exchange (NYSE) and Intercontinental Exchange (ICE).

The investment is important for Circle because it raises the possibility that the two companies could form a partnership that could lead to greater USDC adoption. Most recently, Circle entered into a partnership with Binance, the largest crypto exchange in the world.

The investment may also benefit Circle Internet whenever it decides to go public, which may happen in the coming year, especially if the crypto market rally continues.

Ray Dalio Warns as US Treasury Yields Jump

Another important catalyst for Circle stock is that US Treasury yields have continued to rise this month. The ten-year yield jumped to 5.3%, while the five-year and 3-month have risen to 5.02% and 4.14%, respectively. The latter metric is important because of its business model that involves investing in short-term bond yields.

The crisis may continue now that Ray Dalio is warning about the bond market. In a statement, Dalio warned that top holders of US bonds may continue selling their US debt. China has been selling its US debt, moving from over $1.3 trillion in 2013 to below $700 billion today. Japan is now the biggest holder of US public debt.

If top countries start selling, it means that investors will be left to buy the US issuances. These investors will likely demand a higher interest rate because of the rising risks. The main risk is that US public debt has continued to soar, now at $40.2 trillion.

The rising US bond yields is positive because it has coincided with the ongoing USDC growth. USDC now has a market cap of over $74 billion.

Arc Layer 1 Blockchain Growth is Continuing

Meanwhile, the recently-launched Arc Blockchain continues to grow. It has already attracted 71 protocols in the DeFi industry, including popular names like Morpho Blue, Aave, Uniswap, and Circle Gateway. Its total value locked (TVL) jumped to over $553 million. Morpho Blue has a TVL of over $323 million, while Aave and Uniswap have a TVL of over $182 million and $33 million.

Arc’s stablecoin market cap has also continued to grow this month. It has over $532 million in stablecoins, with most of them being USD Coin. Rising stablecoin growth and DEX volume is a sign that it has utility.

Circle Stock Price Technical Analysis

The daily chart shows that the CRCL share price has slumped in the past few weeks. It has slumped from a high of $103.23 on 3rd September to its current level of $83.30.

The stock has remained above the ascending trendline that links the lowest swings since August. At the same time, there are signs that it has formed a double-bottom pattern at $79 and a neckline at $99.85.

Therefore, the stock will likely bounce back, potentially to the psychological level of $100. A move above that level will signal further gains, potentially to $120.

This article is for informational purposes only and does not constitute financial or investment advice. Stock prices, stablecoin supply, interest rates and technical levels may change as market conditions evolve.