COIN has traded lower in six straight sessions – Crypto News – Crypto News
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COIN has traded lower in six straight sessions – Crypto News

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  • Coinbase trades lower for the sixth consecutive session.
  • The National Futures Association approved Coinbase’s crypto futures trading plans on Wednesday
  • COIN stock has been in a downtrend since July 14.
  • Support for Coinbase stock comes at $76, about 4% below the current price.

 

Coinbase Global (COIN) stock has now traded lower in six straight sessions as of Wednesday. The crypto exchange and platform business announced Wednesday that it had received regulatory approval to launch crypto futures, and COIN shares initially advanced nearly 4% on the news before worrying FOMC Minutes sent the overall market and COIN into a tailspin.

The FOMC Minutes from last month’s Federal Reserve meeting showed that a majority of governors thought further tightening would be required to get a handle on core US inflation. However, the CME FedWatch Tool gives only an 11% chance that the central bank raises rates at its September policy meeting and a 33% chance it does so at the December meeting.

Coinbase stock is down more than 1% in the premarket on Thursday despite NASDAQ 100 futures advancing 0.4%.

Coinbase stock news

Coinbase received approval for its futures platform from the US National Futures Association (NFA), a self-regulatory institution designated by the Commodity Futures Trading Commission (CFTC). The approval gives Coinbase the right to become a futures commission merchant.

“Coinbase will now be the first crypto-native leader to directly offer traditional spot crypto trading alongside regulated and leveraged crypto futures, on an integrated trading solution for our verified customers,” a company spokesperson said in a statement.

Coinbase executives began the process of seeking futures permission back in September 2021, so the whole ordeal took nearly two years to bear fruit. Last year Coinbase purchased the regulated derivatives exchange FairX and changed its name to Coinbase Derivatives Exchange. 

“The global crypto derivatives market represents ~75% of crypto trading volume worldwide and is a critical trader access point,” Coinbase said in a statement. “The ability to trade using margin gives customers leverage and access to the crypto market with less upfront investment than traditional spot trading.”

Already this year alone, Coinbase reports that $4.7 billion in notional value of Bitcoin futures have been traded on the platform. Additionally, $2 billion worth of Ethereum futures have exchanged hands. 

In other news, filings from prominent hedge fund Coatue Management show it sold 637K class A shares of Coinbase during the second quarter.

 

Nasdaq FAQs

The Nasdaq is a stock exchange based in the US that started out life as an electronic stock quotation machine. At first, the Nasdaq only provided quotations for over-the-counter (OTC) stocks but later it became an exchange too. By 1991, the Nasdaq had grown to account for 46% of the entire US securities’ market. In 1998, it became the first stock exchange in the US to provide online trading. The Nasdaq also produces several indices, the most comprehensive of which is the Nasdaq Composite representing all 2,500-plus stocks on the Nasdaq, and the Nasdaq 100.

The Nasdaq 100 is a large-cap index made up of 100 non-financial companies from the Nasdaq stock exchange. Although it only includes a fraction of the thousands of stocks in the Nasdaq, it accounts for over 90% of the movement. The influence of each company on the index is market-cap weighted. The Nasdaq 100 includes companies with a significant focus on technology although it also encompasses companies from other industries and from outside the US. The average annual return of the Nasdaq 100 has been 17.23% since 1986.

There are a number of ways to trade the Nasdaq 100. Most retail brokers and spread betting platforms offer bets using Contracts for Difference (CFD). For longer-term investors, Exchange-Traded Funds (ETFs) trade like shares that mimic the movement of the index without the investor needing to buy all 100 constituent companies. An example ETF is the Invesco QQQ Trust (QQQ). Nasdaq 100 futures contracts allow traders to speculate on the future direction of the index. Options provide the right, but not the obligation, to buy or sell the Nasdaq 100 at a specific price (strike price) in the future.

Many different factors drive the Nasdaq 100 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the Nasdaq 100 as it affects the cost of credit, on which many corporations are heavily reliant. As such the level of inflation can be a major driver too as well as other metrics which impact on the decisions of the Fed.

 

Coinbase stock forecast

Coinbase stock has been trending lower since the July 14 range high at $114.43. On August 3, COIN’s 9-day Simple Moving Average (SMA) broke below its 21-day SMA counterpart, foreshadowing further downside movement. 

Last week, COIN broke through the significant $85 level that served as staunch resistance in both February and March. The next level to tackle comes at $76. That level also proved to be stubborn resistance in July through October of 2022 and then separately as support in early July 2023. 

Coinbase is already slightly below the 50-day SMA, and the 100-day SMA sits near $70. COIN stock could soon enter into oversold territory as it has reached 39 on the Relative Strength Index (RSI). Typically, an RSI reading below 30 means an entity is oversold.

COIN daily chart

 

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