Coinbase (COIN) shares fall to a 2-month low

According to the chart of Coinbase Global (COIN), the stock price of the cryptocurrency exchange is sliding towards the $295 level, a 2-month low.

It is worth recalling that last month we reported that COIN stock had surged to an all-time high around $400. At that time, we:
→ highlighted the long-term grey channel and the short-term blue one;
→ suggested a potential correction from the upper boundary of the grey channel.

Since then, COIN’s share price has declined by more than 20% (yesterday’s drop was fuelled by a broader risk-off sentiment in technology stocks, which we analysed earlier today in the context of the Nasdaq 100 index). If this is indeed a correction from the all-time high, it looks too deep for a bull market. Could COIN shares extend their decline?

Technical analysis of Coinbase (COIN) stock

From a broader perspective, the grey channel remains valid. Following the release of a disappointing earnings report on 1 August, COIN formed a bearish gap and found support near the median of this channel.

Note the price action (highlighted with an arrow) – the bulls attempted to push the price higher but failed. This resembles either a false breakout of the 1 August high or a retest of the gap’s lower boundary – in both cases, a bearish signal. Particularly so given the candlestick with a long upper shadow, forming a gravestone doji pattern.

The MACD indicator suggests “clouds are gathering”: the histogram is approaching zero, while the two lines have turned downward. If the bears manage to build on their advantage, this would imply that:
→ market participants view the psychological $300 level as too high for COIN;
→ the price is moving away from the median of the grey channel and might approach its lower boundary, where buyers typically tend to step in.

If this scenario unfolds, the bears will need to show persistence, given the importance of support at $273.70, where the price rallied strongly in mid-June (a sign of aggressive buying).

It is also worth noting a series of bullish news related to Coinbase (completion of the Deribit exchange acquisition, improved regulatory outlook) – but the stock is already down more than 30% from its record high, which raises concerns.

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