Options Breakthrough in Action | Is the crypto rally back?! Coinbase surges over 14%, Circle rises more than 5%, is there still opportunity?

The core of Circle's business model is the issuance of USDC. When users exchange 1 US dollar for 1 USDC from Circle (or purchase it on a partner platform), Circle receives 1 US dollar in cash. Circle then holds these funds as reserves, primarily investing them in low-risk, highly liquid assets such as short-term U.S. Treasury bonds and cash to generate interest income, which is referred to as Reserve Income.

This model has achieved significant financial success. Performance data shows that Reserve Income reached $711 million, accounting for over 96% of total revenue, making it the company’s primary revenue driver. This directly drove Circle to achieve revenue of $770.2 million in Q4 2025, marking a substantial year-over-year increase of 77%, and earning continued positive outlooks from analysts regarding its growth momentum.

However, its earnings (EPS) have experienced significant volatility, with a substantial loss recorded in Q2 2025 due to IPO-related expenses (EPS at -4.48). The current trailing twelve-month price-to-earnings ratio (PE_TTM) is negative, rendering traditional valuation methods ineffective. The market is now valuing the company based more on USDC’s market share, growth rate, and future potential ecosystem revenues (such as payment networks and the Arc blockchain).

The company provided revenue guidance for the fiscal year 2026 at $150-$170 million. Assuming $160 million, Circle’s market capitalization as of the close on March 4 was $25.507 billion, resulting in a forward price-to-sales ratio (Forward P/S) of approximately 15.9 times, still relatively high.

Investing in Circle requires looking beyond the revenue figures and conducting a deeper analysis. Its profitability heavily relies on the circulation scale of USDC and market interest rate levels, while also requiring high distribution costs to be paid. Therefore, its long-term value lies more in: securing and expanding USDC’s market share, its ability to respond to global interest rate cycles, reducing reliance on single-source interest income, and successfully transitioning to developing platform and ecosystem businesses.

As of March 5,$Circle (CRCL.US)$ The stock price is trading around $104-$105. A sharp short-term rise has led to multiple technical indicators signaling severe overbought conditions, with the 24-day deviation rate (BIAS_24) reaching 54.972% and the 6-day Relative Strength Index (RSI_6) hitting 88.572%. This suggests that the stock price has accumulated significant profit-taking pressure in the short term and may face a technical correction. However, the stock price has strongly broken through all major moving averages (MA), potentially establishing a medium-term upward trend.

Fund flow data indicates that on March 4, when the stock surged, CRCL saw a net outflow of $62.6884 million, with small-lot outflows particularly noticeable. This divergence from the rising stock price may indicate retail investors are taking profits while institutional investors were engaged in intense trading that day.

On the other hand, recent disclosures reveal that several executives and directors of the company have either announced stock sale plans or executed sell orders, involving amounts ranging from hundreds of thousands to tens of millions of U.S. dollars. Insider selling activities need attention, as they may signal that insiders believe the current stock price is within a reasonable or relatively high range.

The options market was highly active on March 4, with total trading volume reaching 150,100 contracts and open interest at 768,800 contracts, both significantly higher than recent averages. This indicates that substantial capital is engaging in speculation on the stock through options.

As of March 4, the overall implied volatility (IV) of its options reached 92.98%, far above the market average. This reflects the options market pricing in expectations of high volatility for the stock in the future. The IV percentile stands at 60%, meaning the current IV level is relatively high compared to the past year.

Notably, there was an unusual large trade executed that day involving a buy of put options expiring on June 18, 2026, with a strike price of $100, with a volume of 1,781 contracts. This transaction may indicate that some investors are willing to pay for insurance against potential declines in the coming months or are making directional short bets at current elevated levels.

Coinbase's revenue structure is improving. In its latest earnings report, the company highlighted the implementation of its Everything Exchange strategy and the expansion of the Base chain ecosystem, providing a new narrative for long-term growth. Additionally, securing key regulatory licenses like the EU MiCA strengthens its compliance moat and lays the groundwork for global expansion.

Although trading revenue remains susceptible to market cycles, as mentioned earlier, subscription and service revenues (including custody fees, block rewards, and stablecoin income) have steadily increased, reaching $2.8 billion in 2025, growing by 23%. This enhances the stability and predictability of the company’s revenue. Coinbase's Assets Under Custody (AUC) has hit a historic high of $300 billion, underscoring its core position in the industry.

Financial forecasts show that market analysts' consensus expects its revenue for the first quarter of 2026 to be $1.5858 billion, followed by sequential growth. However, its current trailing twelve months price-to-earnings ratio (PE_TTM) is approximately 46.95 times, placing it at a relatively high valuation percentile within its sector, reflecting the market's premium on its leading position and transformation prospects.

$Coinbase (COIN.US)$ On March 4, it broke through strongly with a high-volume large bullish candlestick, and trading volume surged to 27.2 million shares. Similar to CRCL, the rapid rise has also pushed its technical indicators into a severely overbought zone, such as the 24-day deviation rate (BIAS_24) being 21.216%. An effective breakout often requires subsequent confirmation.

The 20-day moving average ($168.76) has become the new key dynamic support level. This high-volume confirmed bullish breakout, combined with the upward shift of critical moving average support, constitutes a positive signal for a potentially continuing trend in technical terms. It’s necessary to monitor price reactions near this newly formed support to evaluate the validity of the breakout.

Unlike CRCL, COIN experienced strong net inflows of funds (USD $56.1291 million) during the upward movement, with major funds (large and very large orders) showing overwhelming net buying (USD $91.8692 million). This indicates that institutional investors and other large funds are primarily driving its rise.

$Coinbase (COIN.US)$ The implied volatility (IV) of options on March 4 was 75.03%, which is at a relatively high historical level (IV percentile at 79%). High IV means that the option pricing anticipates significant future stock price fluctuations.

Meanwhile, there was a large buy order for put options expiring on March 20 with a strike price as high as $340. This transaction may indicate investors purchasing insurance for their held stocks or speculating that the stock price will not reach such a high level in the short term.