Coinbase stock in slight recovery

After a sharp decline in recent days, the Coinbase stock now appears to be rebounding slightly on the Nasdaq. 

However, one should not be fooled by the short term. 

The small rise of the Coinbase stock

On 6 June, at the height of the storm caused by the SEC complaint, Coinbase’s share price had fallen as low as $46. 

However, this was not a true collapse, so much as there had already been another descent to more or less that point in early May. Indeed, 2023 started at $36, so that $46 touched on 6 June is not then a particularly low level. 

By 9 June the price had returned to $57, an excellent 24% rebound in three days. It is worth remembering that Coinbase’s share price is heavily influenced by the volatile trend in the crypto markets, so while +24% in three days may be a lot for the stock market, it is not that unusual for Coinbase shares. 

The difficulties were by no means over, so much so that on 12 June it was back down to $50. In the following days there was a new bounce, which brought the price back above $55. 

The current price is in line with what it was at the end of January, but still far below the annual high of 2023 touched on 3 February at nearly $88. 

What’s more, even shortly after mid-March the price was back above $85, so the current price is significantly lower than the annual highs touched twice so far. 

Coinbase’s historical stock performance

The listing of Coinbase stock on Nasdaq occurred in April 2021, at the height of the speculative bubble, at a price of $380. 

However, this price was heavily influenced by the great speculative bubble that was going on, so much so that on the very day of the listing it even rose above $400. 

Until November of that year, when the peak of the last big crypto bull run was reached, the price had more or less fluctuated between $300 and $370, but with the arrival of the bear-market it collapsed. 

Within eleven months it has lost 91% from the highs, which is much more than Bitcoin and Ethereum have lost. This is both because Coinbase’s share price in 2021 was really overinflated, and because the crypto market’s collapse in 2022 as a whole had far greater proportions than that of the price of BTC and ETH. It is enough to think of the implosion of the entire Terra/Luna ecosystem. 

The absolute low was touched below $32, which is more than ten times lower than the initial placement level. 

It has since recovered as much as 72%, although the 2023 annual high price of Coinbase shares was as much as 170% higher than the 2022 low. 

Volatility

In other words, Coinbase’s stock price on the Nasdaq has even greater volatility than that of Bitcoin or Ethereum, despite the fact that they are shares of a publicly traded company. 

The extreme volatility of the COIN stock is mainly affected by the high volatility of the entire crypto market, which is far higher than that of its major cryptocurrencies. 

Then again, in 2021, sometimes the cryptocurrencies that generated higher trading volumes, and thus higher revenues for exchanges, were minor cryptocurrencies that for a short period achieved resounding successes thanks only to hype bubbles that then deflated as quickly as they formed. 

Cases such as Shiba Inu, Dogecoin, and Luna greatly influenced Coinbase’s business, both for better and worse. 

Moreover, this was compounded in 2021 by a real excess of euphoria for the COIN stock itself, which is the only US crypto exchange so far approved to go public. 

This has led the bubble to inflate even more on the Coinbase stock price, thus generating a greater collapse during the bear-market. 

The forecast for the stock

In light of all this, it is not surprising that the forecast for Coinbase’s stock price in the short term is slightly bullish, as long as there is no more negative news coming out about it, for example regarding the SEC lawsuit.

As things stand right now, according to some analysts, the price could head toward $69, which is just below the $70 that has often proven to be important resistance during 2023. 

This resistance has been broken only four times during this year, but Coinbase’s share price has still never managed to stay above that threshold for more than a week during 2023. 

Moreover, back in early June it had already tried to get close to $69 again, just before the negative news from the SEC began to come out. 

Therefore, the hypothesis is that, in the absence of further negative news, it may resume the upward trend that began in early May and ended between 5 and 6 June. 

In the medium/long term, on the other hand, the matter is completely different, and much will depend on the fate of the crypto markets themselves.