Coinbase Global Stock Forecast: COIN drops another 2% despite futures trading approval

Coinbase Global (COIN) stock has now traded lower in six straight sessions as of Wednesday, and Thursday might make it seven. COIN stock lost 2% to trade at $77.45 in the first half hour of the regular session on Thursday. The overall market is mixed as the Dow Jones index advances slightly and the NASDAQ Composite pulls back gingerly.

The crypto exchange 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 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.

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