Coinbase Global Inc Stock News and Forecast: COIN falls on tentative SEC lawsuit against interest program

• Bitcoin plunges as it fails to hold $50,000.
• COIN and other crypto stocks also fall on the back of crypto woes. 
• COIN stock retraces to 9-day moving average support.

A tough first day for El Salvador then in the crypto game, but reports say they bought the dip. Bitcoin had been looking steady, and it appeared to have finally broken the $50,000 resistance level and was holding above it. Crypto stocks were set for gains, but Bitcoin rolled over quite violently, bottoming out near $42,000. COIN obviously suffered on the back of it, with the crypto exchange losing 4% to close at $266.81. This has brought the stock back to the breakout level and to its 9-day Simple Moving Average (SMA). COIN needs to hold this level to hang onto support, otherwise we are back into range and choppy sideways trading. 

The fall in Bitcoin appears to have been largely attributed to El Salvador having less than a smooth rollout of the crypto leader as its legal tender. The World Bank said it could not help El Salvador due to environmental and transparency concerns, and then several crypto platforms had issues during the day. "While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings," said a spokesperson. Salvadorans were trying to download the digital wallet Chivo but ran into difficulties with the government having to temporarily unplug the Chivo app to connect more servers to deal with demand, according to Reuters. 

As we have often mentioned here at FXStreet, markets hate uncertainty and this appears to be the case for the new crypto markets as well. All this saw Bitcoin fall below $43,000 for the first time since the middle of August. Where Bitcoin goes the crypto sector tends to follow, and so it was on Tuesday with RIOT, MARA and COIN all down sharply. 

Things have not gotten any better for COIN stock this morning as the stock fell over 3% in the premarket. Coinbase said it has been threatened with legal action by the SEC if it goes ahead with plans to let users earn interest by lending crypto assets. According to Reuters, "The SEC has issued Coinbase with a Wells notice, an official way it tells a company that it intends to sue the company in court, Paul Grewal, the company's chief legal officer, said in a blog post. He said Coinbase would delay the launch of its 'Lend' product until at least October as a result."

COIN key statistics

COIN stock forecast

COIN stock had broken out of the August range and looked to be set for more gains, but yesterday's move has retraced us to the breakout level and 9-day SMA. This is fine so long as COIN does not go any lower. COIN stock has to hold $264 or else it is back to neutral.  Unless things change dramatically between now and the open, COIN has already broken lower in the premarket. $294 remains the first upside target to break. The Relative Strength Index (RSI) is still just trending higher along with the Moving Average Convergence Divergence (MACD), which itself has crossed into a bullish signal. None of these signals are too strong though, so we would like to see a break of $294 to really kick things off with $280 providing smaller resistance on the way.

We are now neutral on the stock as it appears to be trading below $264, currently $258 in the premarket.  Bullish above $280 and bearish on a break of $240.

COIN 1-day chart