Yesterday, the US Senate postponed a vote on a bill aimed at defining the structure of the cryptocurrency market. The delay followed the withdrawal of support by one of the industry’s leading players, the Coinbase exchange.

Coinbase CEO Brian Armstrong said the current version of the bill was “worse than having no legislation at all”. According to media reports:

→ the bill could have banned rewards for holding stablecoins (USDC), depriving Coinbase of a substantial share of its revenue;
→ the text was found to contain an effective ban on trading tokenised equities;
→ the bill imposed strict requirements on decentralised finance, undermining user privacy.

A market that had been expecting a regulatory “green light” has instead received another dose of uncertainty. As a result, COIN shares fell by more than 6% yesterday, opening with a bearish gap.

Technical Analysis of COIN Shares

As a reminder, in November we identified a descending channel and noted that Coinbase (COIN) shares were underperforming the broader market.

Since then, COIN has continued to move lower within this channel, with the following developments (marked by arrows):

→ the channel median acted as resistance in mid-December;
→ a bearish reversal formed in January.

Additional bearish signals include:

→ peak B only marginally exceeded peak A, resembling a bull trap;
→ yesterday’s decline occurred on rising volumes, with the close near the session low.

Today, COIN is trading near an important support area around $232.32, formed by a bullish gap from May last year. This could offer some hope to buyers and slow the decline within the channel. However, a strong upside reversal appears unlikely if the fundamental backdrop continues to disappoint cryptocurrency market participants.

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