Shares of Coinbase Global Inc (NASDAQ:COIN) and other crypto-related companies are trading lower Monday morning as Bitcoin (CRYPTO: BTC) struggles to regain footing after crashing below $80,000.
The sell-off has pushed the leading digital asset out of the top 10 global assets, intensifying pressure on the broader crypto equity sector. Here’s what investors need to know.
Why Bitcoin’s Fall Hit Coin Stock
The correlation between Bitcoin's price and crypto stocks is intensifying due to shared macroeconomic drivers. According to macro investor Raoul Pal, the current downturn is not a structural failure of crypto but a symptom of a temporary U.S. liquidity squeeze. Both Bitcoin and crypto equities like Coinbase are long-duration assets, making them highly sensitive to liquidity conditions.
As the Treasury rebuilds its General Account and reverse repo facilities drain, liquidity has tightened, hitting the riskiest assets, tech and crypto, first. When liquidity dries up, the capital flows required to sustain high valuations for both Bitcoin and the exchanges that trade it evaporate simultaneously.
Compounding the negative sentiment, traditional financial institutions are facing severe unrealized losses. ETF holders now sit on approximately $7 billion in losses, with the average institutional purchase price for Bitcoin hovering around $85,360, well above current trading levels.
This creates a drag on market confidence, further depressing stock prices for companies tethered to the crypto ecosystem.
Is Coinbase Primed For A Reversal?
Coinbase is trading 18.9% below its 20-day simple moving average (SMA) and 34.3% below its 100-day SMA, indicating significant bearish pressure. Over the past 12 months, shares have decreased by 31.53%, and they are currently positioned closer to their 52-week lows than highs.
The RSI is at 24.94, suggesting that the stock is in oversold territory, while the MACD is below its signal line, indicating bearish momentum. This combination of an oversold RSI and bearish MACD suggests mixed momentum, highlighting the challenges the stock faces in the current market environment.
- Key Resistance: $207.00
- Key Support: $177.00
Coinbase’s Business Model
Founded in 2012, Coinbase is the leading cryptocurrency exchange platform in the United States. The company intends to be the safe and regulation-compliant point of entry for retail investors and institutions into the cryptocurrency economy.
Coinbase’s significance is heightened in the current market context, as it serves as a high-beta play on the broader crypto market. With a substantial portion of its income coming from transaction fees, any downturn in trading volume could severely impact its financial performance.
Is Analyst Optimism Justified?
Investors are looking ahead to the next earnings report on Feb. 12.
- EPS Estimate: $1.07 (Down from $3.39 YoY)
- Revenue Estimate: $1.86 billion (Down from $2.27 billion YoY)
- Valuation: P/E of 16.8x (Indicates fair valuation)
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $370.04. Recent analyst moves include:
- Piper Sandler: Neutral (Lowers Target to $270.00) (Jan. 14)
- Oppenheimer: Outperform (Lowers Target to $370.00) (Jan. 12)
- Barclays: Equal-Weight (Lowers Target to $258.00) (Jan. 8)
Valuation Insight: While the stock trades at a fair P/E multiple, the strong consensus and 68% expected earnings decline suggest analysts view this growth as justification for the 98% upside to analyst targets.
COIN Shares Drop Monday
COIN Price Action: Coinbase Global shares were down 3.05% at $188.82 at the time of publication on Monday, according to Benzinga Pro data.
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