Coinbase stock price in strong decline

Yesterday, the price of Coinbase shares on the stock market lost more than 15% in a single day. 

The decline occurred simultaneously with the return of the Bitcoin price first below $72,000 and then also below $70,000.

The price of Coinbase shares

On Wednesday, the stock price of Coinbase (COIN) had closed the trading session on the Nasdaq above $211.

Yesterday, on the other hand, it opened at $203, that is, with a -3.5% already at the opening.

Shortly before, some data regarding the US economy had been released, particularly the labor market, and these had caused a bit of a stir in all the US stock exchanges. 

For example, the Dollar Index suddenly dropped from 104.0 points to 103.8 points, only to bounce back almost immediately and return to almost 104.2 points. During the rest of the session, it then more or less settled at 104.1 points, but then fell back below 104 points. 

The problem was not specifically related to Coinbase, so much so that at the opening even the S&P500 index suddenly dropped by 1%.

The divergence was triggered at a later time. 

The crash of the Coinbase (COIN) stock price

It was not a sudden crash, but a continuous decline. 

Note that the decline of the S&P500 index continued to -1.6% in the following hour, then it effectively stopped. A final small drop at the end of the session then brought it to -1.8%.

Instead, the decline in the price of Coinbase shares continued almost uninterrupted until the close of the session. 

After two hours it was already at -9%, and after four hours it had exceeded -10%.

At the close of the session, it first moved to $181, and then to $179.

The reason for the crollo

In reality, if the analysis is extended back in time even just a few weeks, it is discovered that on October 10th, the price of Coinbase shares was below $165.

The following day, when the price of Bitcoin rose significantly above $62,000, the COIN stock had already climbed to $179, which is the current level. 

So between October 14 and 18 there had been a rise probably a bit excessive, likely generated by a slight excess of enthusiasm or by an excessive anticipation compared to the timing of the medium-term price trend of Bitcoin. 

It should not be forgotten that markets always try to anticipate trends, with a kind of competition to see who anticipates them first. This often leads some speculators to move a bit too early, and when this happens, there is a risk that mini speculative bubbles form, short-lived and very limited in scope, precisely due to excessive anticipation. 

Furthermore, one must not forget that the Dollar Index tends to fall after the USA elections, thus favoring the rise in the price of Bitcoin, but there are still a few days left until November 5th. 

And so already on October 18, the price of Coinbase shares had reached more than $210, and that level actually held until the day before yesterday. Yesterday, however, the mini-bubble deflated. 

The trend in the medium-long term

Taking as a reference the $179 from yesterday’s close, it should not be forgotten that at the beginning of September the price of Coinbase shares had also fallen below $150. 

Therefore, net of the mini-bubble in the second half of October, the current price level still does not cause any fear. 

Moreover, the minimum of 2024 is the 114$ from the beginning of February, and since then the cumulative gain is still 55%.

It should be noted that in December of last year, when a bullrun crypto was underway, the price had reached $187, so the current level is still below last year’s maximum. This might indeed not be a good sign, but since during 2024 such a situation has already occurred several times, it seems that the current situation is still within the norm. 

According to several analysts, the price of Coinbase shares, in the event of a new bullrun crypto, could rise well beyond the annual highs, even above $300.

The price of Bitcoin

For Bitcoin, however, the discussion is slightly different.

In fact, COIN has returned close to the levels of October 10, while BTC is still much higher. 

This is due to the fact that on the price of Bitcoin in the second half of October, no mini-bubble has inflated. 

To tell the truth, a tiny mini-bubble might have inflated starting from last Friday, again due to a small excess of anticipation, but if on October 25 the price rose from $67,000 to $69,000, yesterday’s drop brought it back above this latter threshold. 

Simply in recent days it tried to stay above $72,000, but without success. On the other hand, the Dollar Index is still at relatively high levels, and to see the price of BTC rise while DXY falls, it will probably be necessary to wait for the latter to drop below 103.5 points. 

There are only a few days left until the USA elections, and especially in the event of a Donald Trump victory, the price of Bitcoin could rise again, followed by that of Coinbase shares.