Coinbase Stock Price Prediction: COIN Could Plunge by Another 30%

Summary:
• What is the outlook of the Coinbase stock price? We explain why the stock could drop by another 30% in the near term.

The Coinbase stock price has been in a freefall in the past few months as cryptocurrencies crashed. As a result, the COIN stock has dropped to a low of $49.5, about 89% below its all-time high. As a result, the company’s market cap has retreated to about $12 billion, which is significantly lower than its all-time high of over $70 billion. 

Is COIN a good buy?

Coinbase share price has been in a strong bearish trend in the past few months as the price of all cryptocurrencies has nosedived. As a result, Bitcoin has slipped below $20,000 while the total market cap of all coins has dropped to below $1 trillion. At its peak, Bitcoin itself was valued at over $1 trillion. 

At the same time, Coinbase has seen its short interest soared to about 30%. This means that a significant number of outstanding shares are now being held by short-sellers who are benefiting as it drops. 

So, the question among most investors is whether the Coinbase stock price will recover. Besides, the company is in a difficult place as investors lose faith in cryptocurrencies. As a result, Coinbase’s daily trading volume has slumped while the number of new account additions has slumped. 

The answer to this question is that Coinbase share price will recover, but the process will take time. There is a simple explanation for this view. The stock has a close correlation with Bitcoin prices. And as we speak, Bitcoin price is in a strong downward trend.

At the same time, Bitcoin has a close correlation with American indices like the Nasdaq 100 and the Dow Jones. While all these indices are falling, history suggests that American shares always rise in the long term. 

Therefore, there is a high possibility that these indices will recover in the coming months. If this happens, Bitcoin and Coinbase will also recover. The only caveat is that the situation could get worse before it gets better. Therefore, a potential bearish catalyst will be the upcoming earnings.

Coinbase stock price forecast

The daily chart shows that the COIN stock price has recently been in a strong bearish trend. It has now found a strong support level and remained below the 25-day and 50-day moving averages. The stock has struggled, moving below the support at $43.73. 

Therefore, there is a likelihood that the stock will keep falling as bears target the key support at $30, which is about 38% below the current level. In the long-term, however, the stock will bounce back.