COIN and CRCL Stock Outlook as Goldman Sachs Flags 7 Recovery Signals for US Equities

Crypto stocks such as Coinbase (NASDAQ: COIN) and Circle (NYSE: CRCL) are in focus after Goldman Sachs flagged seven recovery signals for US-listed equities. However, the investment bank notes that the recovery may not play out until the end of 2026.

The two crypto stocks are already up on election day, with COIN stock price jumping by 5% at press time to trade at $144.

CRCL stock price was also up by 2.91% to trade at $74, marking a notable reversal from the previous day’s dip.

However, charts show that the two stocks have yet to confirm a bullish reversal amid a bearish sentiment in the broader crypto market.

Goldman Sachs Maps recovery For US Stocks

According to Goldman Sachs strategist Brian Garrett, there are seven signs that suggest US stocks might be bound for a recovery. The first is that the net exposure of hedge funds is at bear market levels, with leverage dropping to historic lows of 47%.

Secondly, the S&P 500 index is edging lower while nearly 80% of the indexed stocks are rising. This suggests the drop is largely focused on the tech sector that has been bleeding because of a widespread AI selloff.

Garrett also mentions high defensive stock valuations, a surge in implied volatility and the bottoming of semiconductor valuations as additional signals of a looming recovery.

The outperformance of non-AI stocks and the exhaustion of dip buying by retail traders is also flushing the excess leverage per Garrett’s analysis, which may be creating a healthy setup for stocks like COIN and CRCL to edge higher.

COIN and CRCL Stock Prediction if Goldman Sachs Bullish Outlook Plays Out

COIN stock price was up by 1.85% at the time of writing, suggesting that traders were shrugging off the uncertainty around the US midterm election.

Besides Goldman Sachs, JPMorgan also forecasts that the S&P 500 index will likely reach a new all-time high by year end, mirroring the gains seen after previous midterm elections. An S&P 500 uptrend is bullish and COIN and CRCL stock prices.

As for COIN, the shares will first need to reclaim the support at $146 to suggest that a reversal may be underway.

The 20-week EMA resistance at $170 is the first obstacle whose breakout will confirm that COIN stock price is making an uptrend. Closing above this EMA could then push Coinbase shares towards the 78.2% Fib of $203.

The CMF on the weekly chart is also making higher lows to suggest that the selling pressure behind the recent downtrend may be losing steam which may support a recovery for COIN stock in line with the bullish outlook on US equities by Goldman Sachs.

The setup for CRCL stock price in case of a post-midterms rally is even more defined. A recovery will push the shares to the first resistance at $77. Breaking this resistance may push the shares to the 61.8% Fib of $83.

The Bollinger bands are widening on the daily chart, which suggests that volatility is about to increase. The upper Bollinger band at $90 is the main target to watch if this volatility also brings buyers to the market.

The ADX line at 14 also shows that the downtrend that began in early September is losing momentum, which also suggests that CRCL stock may be prime for a recovery alongside other US equities.

Morgan Stanley’s Bearish Outlook May Hinder Gains

Morgan Stanley is not optimistic that crypto stocks will recover alongside other US equities. In fact, the investment bank has trimmed its COIN stock target from $258 to $120 and trimmed its CRCL stock price target from $37 to $34.

The bank attributes its bearish outlook on COIN to weaker revenue and uncertainty around the crypto market following the recent $6.3 billion Binance hack.

As for Circle, Morgan Stanley says the slow growth of USDC and low activity on the Arc blockchain may weaken the stock’s performance.

If this outlook causes uncertainty around the stocks, especially now that the crypto market sentiment is weak, they could fail to record the same gains as other US equities if the bullish outlook by Goldman Sachs plays out.