Cryptocurrency prices have suffered a major decline in the past few days as investors take profits and worry about the Federal Reserve. This decline has pushed the Coinbase stock price to the lowest level since March 16th. COIN has fallen by more than 20% from its highest point in March, bringing its total market cap to about $38 billion.
Coinbase is a large cryptocurrency exchange with over 90 million customers worldwide. The company helps move billions of dollars every day. While Coinbase has a large market share, it operates in a highly competitive environment, with companies like Binance, Crypto.com, and Kraken having a strong market share in the sector.
Coinbase stock price has a strong correlation with Bitcoin prices. When Bitcoin rises, it tends to push other altcoins upwards with it in most cases. At the same time, as the price rises, it pushes more traders to its ecosystem as they seek to benefit from the bullish momentum. For example, the COIN stock rose sharply in March as cryptocurrency prices rose. This explains why the stock has declined sharply this week.
Coinbase has also dropped as analysts cut their estimates on the company. Most of them cite the fact that on-chain shows that Bitcoin held in exchanges has dropped to the lowest level in months. On Tuesday, analysts at Mizuho lowered their target for the stock, citing digital coins’ performance. This came as analysts at Citi also lowered their target.
Some analysts believe that investors bullish on Bitcoin should buy Bitcoin instead of Coinbase. Indeed, historically, while the two have a close correlation, Bitcoin has done better than Coinbase.
Coinbase stock price forecast
The daily chart shows that the COIN price has been in a bearish trend in the past few months. In March, it managed to move above the upper side of the descending channel as the Bitcoin price rose. Now, it has retreated and moved back inside the channel. It has also moved below the 25-day and 50-day moving averages. Therefore, the Coinbase stock price will likely keep falling in the coming days as bears target the next support at $153, along the lower side of the channel.