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​Coinbase (COIN) stock plunges over 10%; Here’s why

​Coinbase (COIN) stock plunges over 10%; Here’s why

Coinbase (NASDAQ: COIN) stock fell by more than 10% on Tuesday, November 8, as COIN shares were impacted by the uncertainty in the crypto market surrounding rival cryptocurrency exchangeFTX

FTX is currently attempting to avert a collapse as well as a potentially far-reaching domino effect over the whole cryptocurrency sector, which is still licking its wounds after the Terra crash. Although the market seemed to be settling and bottoming, most assets have faced significant selling pressure, and the market lost more than $100 billion in 24 hours at one point.

As crypto regulation becomes more scrutinized than ever, the Federal Financial Supervisory Authority of Germany, better known as BaFin, has issued an order relating to Coinbase’s local arm’s business organization in line with the country’s banking rules. In a November 8 notification, BaFin said it had issued the order to Coinbase Germany GmbH for breaches of the German Banking Act’s “appropriate business organization.”

COIN chart and analysis

In the last month, COIN has been trading between $47.69 – $78.29, and it is currently trading near the lows of this zone. In terms of resistance, an area ranging from $65.19 to $66.24 is formed by combining multiple trend lines and critical moving averages (MA) across various time frames.

Since volume has been considerably higher in the last couple of days, combined with the strong move down, COIN does not present a quality setup. Price movement has been a little too volatile to find a solid entry and exit point. 

COIN 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

Wall Streets analysts rate COIN a ‘moderate buy,’ with price predictions for the next 12 months seeing a potential increase of 64.86% from the current trading price of $50.83 to a potential price of $83.80 per share. 

Furthermore, out of the 22 TipRanks analysts covering Coinbase Global, eleven have a ‘buy’ rating, seven have a ‘hold’ rating, and four with a ‘sell’ rating based on their performance over the last three months.

Wall Street analysts’ price targets for COIN. Source: TipRanks

Coinbase’s technical analysis (TA) indicators on the 1-week scale show mixed results. The weekly summary gauge is a ‘sell’ zone at 11, while the moving averages point to a ‘strong sell’ at 10 with no buys. Meanwhile, the weekly oscillators are still not refusing to budge from their ‘neutral’ position, with 8.

Coinbase technical analysis. Source: TradingView

Positive developments for COIN stock

According to the firm’s daily transaction brief, Ark Invest, led by long-time Bitcoin bull Cathie Wood, acquired 420,949 shares of COIN valued at little less than $21.4 million despite the chaos in the market.

The majority of the total number of shares purchased—approximately 330,00—went to ARKK, the company’s flagship exchange-traded fund (ETF) that invests in firms pursuing disruptive innovation.

There was an increase of 54,466 Coinbase shares added to the Ark Next Generation Internet ETF (ARKW). In contrast, a rise of 36,022 COIN was set aside for the ARK Fintech Innovation ETF (ARKF), as shown by publicly available data.

Coinbase’s stock price is down about 80% from the start of the year; lagging behind is Bitcoin (BTC), down over 70% during the same time period. The firm disclosed its financial results for the third quarter in a letter to its shareholders that was sent out the previous week. The company said its net revenue for the period was $576 million, a 28% decrease from the $803 million it recorded for the second quarter. 

Despite this, the company’s income from subscriptions and services during the third quarter increased to $211 million from $147 million.  

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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