KONSKIE, POLAND - November 03, 2018: Coinbase Pro cryptocurrency exchange logo on smartphone
Coinbase stock price has collapsed as concerns about the health of the crypto industry continued. COIN shares dropped to a low of $44, which was the lowest level since June this year. It has tumbled by more than 62% from its highest level in August and by over 90% from its all-time high. Its market cap has collapsed to about $10.
Coinbase is the second biggest crypto exchange in the world. At its peak, the company had over 90 million customers from around the world. The company was valued at more than $74 billion as investors remained optimistic about the future of the crypto industry.
Coinbase stock price has collapsed this year as the crypto sector battles its biggest headwinds ever. The total market cap of all cryptocurrencies collapsed from more than $3 trillion to less than $850 billion. Bitcoin prices collapsed from near $70,000 to about $16,000.
The most recent results showed that the company’s losses mounted in the third quarter while its revenue plunged. Unfortunately, the company’s situation will continue to worsen after the collapse of FTX and Genesis. For one, most crypto investors have started pulling out funds from exchanges.
Still, there are some positives for Coinbase. For one, it is a highly regulated company, which could benefit as investors move from FTX. A good example of this is what happened during the Global Financial Crisis (GFC). At the time, the collapse of Lehman Brothers led to strict regulations in the banking sector, which made banks safer.
A key risk for Coinbase is that it will need to write off most of its Ventures investments. Coinbase Ventures portfolio is made up of companies like BlockFi, Acala, Arweave, Audius, Arbitrum, and Hashflow among others.
Therefore, while the Coinbase stock price will remain under pressure for a while, there is a likelihood that it will rebound in the long term. Besides, Coinbase is seen as a relatively safe crypto exchange than foreign ones like Binance and OKX.
The daily chart shows that the COIN stock price has been in a strong downward trend in the past few months. It moved to the key support level at $44 and has dropped below the 25-day and 50-day moving averages. The Stochastic Oscillator and the Relative Strength Index (RSI) moved to the oversold level.
Therefore, there is a likelihood that the stock will have a bearish breakout in the near term. If this happens, the next key support level to watch will be at $35. A move above the resistance level at $55 will invalidate the bearish view. The bearish view is in line with my previous Coinbase forecast.
In the long-term, the extremely oversold stock will likely rebound in 2023. The key level to watch will be at $80.
This post was last modified on Nov 23, 2022, 07:47 GMT 07:47