Coinbase Global Stock Forecast: After COIN plunges 14%, expect another 22% decline


  • Coinbase sold off Thursday due to the SEC fining the Kraken exchange's staking product.
  • Coinbase received 11% of its net reveue from staking in the third quarter.
  • COIN lost 14% in the session.
  • Coinbase stock has broken through two support levels in the past 24 hours.

Coinbase Global (COIN) stock haemorrhaged throughout Thursday's session after the United States Securities & Exchange Commission (SEC) leveled a $30 million fine against rival crypto exchange Kraken for allegedly creating an “unlawful offer and sale of securities" through its crypto staking program. Though Coinbase management denied its own staking product was similar or was in violation of the SEC, the market saw things differently.

COIN stock plunged 14.1% to $59.63 on Thursday and then tumbled down to $59 even afterhours.

Coinbase Global stock news: Kraken fine hits close to home

Coinbase was quick to strike down any comparison with Kraken. Coinbase Chief Legal Officer Paul Grewal told Bloomberg that his company's staking product would continue as normal.

“Coinbase’s staking program is not affected by today’s news,” Grewal said in a statement. “What’s clear from today’s announcement is that Kraken was essentially offering a yield product. Coinbase’s staking services are fundamentally different and are not securities.”

CEO Brian Armstrong took a different tact when he blasted the SEC on Twitter for "regulation by enforcement":

Coinbase suffered its worst rout since July of last year when it was reported that US regulators were determining whether it had violated the law by allowing investment in unregulated securities. A total ban on staking in the US would significantly effect Coinbase's business as staking revenues made up 11% of net revenue in the most recently reported quarter.

Coinbase will report its calendar fourth quarter results on February 21. Wall Street is expecting a GAAP loss of $-2.51 per share, and an adjusted per share loss of $-1.41, on revenue of $593.6 million.

Coinbase Global stock forecast

The reason why Coinbase stock is likely to fall further are three-fold. First, Thursday's plunge and subsequent continued sell-off in the postmarket shows the real fear felt by traders. Though COIN stock has begun to enter the realm of value investors, Thursday's plunge demonstrates that a large quadrant of shareholders do not bear diamond hands. The most important point on the chart is the break of $62. That price level supported COIN stock in September and October of last year on multiple occasions, demonstrating its significance. The premarket here on Friday has also seen COIN price move below the 21-day moving average, which had supported the price on Thursday. Breaking these two support levels tells us that COIN is unready to consolidate here.

The second confirmation is that the Relative Strength Index (RSI) has been strongly in overbought territory in the first week of February. As happened in early August of 2022, this typically ends with a sharp sell-off and stubborn bear market.

The third reason involves the macro picture. This week's equity market has turned lower as market participants have begun to understand that January's rally got out of hand. Federal Reserve Chair Powell's statements mid-week proved resonant for bulls who figured that interest rates were likely to come down soon. Instead, Powell said he expected rates to be high for some time to ensure a healthy price level equilibrium was reached. Russia's new offensive in Ukraine is also making February look unsafe for risk assets. For all of these reasons, expect COIN stock to fall back to $46 for support, which would entail a 22% decline from here.

COIN daily chart

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD languishes near multi-year low after RBA meeting minutes

AUD/USD languishes near multi-year low after RBA meeting minutes

AUD/USD remains depressed after the December RBA meeting minutes reiterated that upside inflation risks had diminished, which reaffirms bets for a rate cut in early 2025. This, along with concerns about China's fragile economic recovery and US-China trade war, undermines the Aussie and weighs on the currency pair.

AUD/USD News
USD/JPY sticks to positive bias after BoJ meeting minutes

USD/JPY sticks to positive bias after BoJ meeting minutes

USD/JPY holds steady above the 157.00 mark and moves little following the release of the October BoJ meeting minutes, emphasising a cautious approach to monetary policy amid domestic and global uncertainties. Adding to this, doubts over when the BoJ will hike interest rates again, which, along with a positive risk tone, undermines the safe-haven JPY.

USD/JPY News
Gold flat lines above $2,600 ahead of holiday trading week

Gold flat lines above $2,600 ahead of holiday trading week

Gold price trades flat around $2,610 during the early Asian session on Tuesday. Markets face a relatively quiet trading session ahead of the holiday trading week. The US Richmond Fed Manufacturing Index for December is due later on Tuesday. 

Gold News
Ethereum risks a decline to $3,000 as investors realize increased profits and losses

Ethereum risks a decline to $3,000 as investors realize increased profits and losses

Ethereum is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days. If whales fail to maintain their recent buy-the-dip attitude, ETH risks a decline below $3,000.

Read more
Bank of England stays on hold, but a dovish front is building

Bank of England stays on hold, but a dovish front is building

Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures