CRCL Stock Outlook: ARK Invest Dismisses OUSD Threat to Circle as Cathie Wood Scoops $13M Shares

Circle (NYSE: CRCL) stock dropped by 1.65% on July 9, to close trading at $63. The drop mirrored the downturn seen with other crypto stocks like MSTR and COIN that also closed lower on July 9 after the broader crypto market dropped.

But that drop moved ARK Invest to buy the dip, with the fund manager arguing that Circle’s USDC stablecoin will retain its share in the stablecoin market despite the launch of the OUSD stablecoin on June 30.

ARK Invest Buys the CRCL Dip, Reiterates Bullish Outlook

Data from the Ark Invest tracker shows that ARK Invest purchased $13.7 million worth of CRCL shares on July 9. The firm purchased 159,404 of these shares through its ARKK ETF, while 40,685 and 18,807 CRCL stock were purchased through the ARKW and ARKF ETFs, respectively.

This purchase comes barely two weeks after ARK Invest purchased another $17.8 million worth of CRCL shares on July 1.

The fund manager is making these buys despite a previous warning by Jefferies, saying that people might abandon Circle’s USDC for the OUSD stablecoin that claimed to have partnered with 140 institutions when it launched on June 30.

However, ARK Invest analyst Lorenzo Valente has dismissed this warning, saying that OUSD might not replace USDC because firms like Binance will not overhaul their entire operations and go for a new stablecoin.

“OUSD is not insignificant… But the market has overestimated the speed at which the shared profit model can break existing liquidity barriers,” the analyst said.

While CRCL stock did not rally after ARK Invest’s $13 million purchase or analyst Valente’s bullish thesis, technical analysis suggests that bulls still have a good grip.

CRCL Stock Price Defends Key Support Level as Bullish Momentum Fades

CRCL stock price has touched the support of $61 three times since June 30. But each time the price dropped to this support, it bounced back up, suggesting that this is where buyers are entering the market.

If this crypto stock closes above this support of $61 for three straight days, the price could gain and reach the resistance of $84.

The AO bars that are negative but green suggest that bears are losing control. These AO bars support that the CRCL stock price could move from $61 to the June 22 high of $84.

However, the RSI reading of 34 suggests that the momentum is still bearish. This RSI reading needs to move above 50 to confirm that CRCL stock could move to $84.

But if this bullish thesis fails and CRCL stock price closes below the support of $61, it might drop to the February low of $50.

CLARITY Act Nears Crucial Deadline

A previous report by CoinGape stated that the final draft for the CLARITY Act could be released before August 7, when the US Congress breaks for the summer recess.

This final draft could remove regulations around stablecoin yield after banks fought back, saying that allowing Coinbase and Circle to pay out yields on stablecoins would reduce the deposits made with banks.

Besides CLARITY, financial regulators in the US will release GENIUS Act rules on July 18 that will guide stablecoin issuers like Circle on how they will issue and manage stablecoins.