On Thursday, stock market traders were concerned about the sharp drop in Coinbase shares, listed on the Nasdaq, which fell by 9%. This was triggered by rumours that the Chicago-based CME Group is planning to launch cryptocurrency trading, posing a challenge to Coinbase, currently the leading cryptocurrency exchange in the US.

It is worth noting that CME already trades Bitcoin futures (since December 2017) and Ethereum futures (since February 2021). Is it possible for CME to launch spot cryptocurrency trading?

On one hand, interest in the cryptocurrency market has surged in 2024, with Bitcoin’s price up approximately 58% year-to-date, and around 146% over the past 12 months.

On the other hand, CME Group, as the world’s largest operator of exchange-traded derivatives, is considered a fundamental part of the US financial system. The SEC is unlikely to be favourable towards initiating cryptocurrency trading there, given their reputation for high risk.

Nevertheless, the sharp decline in Coinbase shares on Thursday did not continue into Friday.

Technical analysis of COIN shares shows that:
→ Friday's closing price is higher than Thursday's, and Friday's low is above Thursday's low, indicating that the bearish momentum has eased;
→ The price is at a crucial support level of $200 per COIN share. This is not only a round psychological mark but also near the 50% retracement level after the A→B impulse rally. Additionally, the price is near the lower boundary of the upward channel shown in blue.

Given the above, it is reasonable to assume that bulls may attempt to resume the upward trend by breaking the red resistance line, marking a pullback within the multi-month rally.

However, the inability of bulls to "bounce" from the $200 level per COIN share could indicate a potential decline to the lower boundary of a less steep upward channel (shown in green) around $150 per share.

According to TipRanks, the average target price for COIN shares is $250 over the next 12 months.

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