Coinbase Stock Crumbles as Bitcoin Drops

Bitcoin is dropping amid comments from a Chinese central bank official

Assistant Editor
Jul 8, 2021 at 10:31 AM
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Cryptocurrency exchange name Coinbase Global Inc (NASDAQ:COIN), which trades in tandem with Bitcoin (BTC), is down 6.3% to trade at $236.17 at last check, as Bitcoin drops below $33,000. China's bitcoin miners account for as much as 70% of the miner population, so the recent crackdown on mining and crypto trading in China has had an effect. Today, Bitcoin is dropping after comments made by People's Bank of China vice governor Fan Yifei, who regards "stablecoins" as speculative tools that threaten financial and social stability.

Headwinds today are also stemming from the broad market selloff, as investors dump riskier assets and flock to safer ones. There remains a growing fear on Wall Street that not only is the global economic recovery mostly already baked in, but the spread of the Covid-19 delta variant could disrupt the frenetic progress global markets have made the last 12 months.

Also weighing on COIN today is a price-target cut from Goldman Sachs to $298 from $306, just one day after Oppenheimer's price-target hike to $444 from $434. The brokerage bunch is leaning bullish on Coinbase stock, with nine of the 14 analysts in coverage sporting a "strong buy" rating.

Options traders have been more often bullish on the security as well. This is per Coinbase stock's 10-day call/put volume ratio of 1.75 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).  Today, calls are winning out on an absolute basis, though volume is also running at nearly double the average intraday amount. At last check, 22,000 calls and 13,000 puts have crossed the tape, with the July 240 call seeing the most activity. 

On the charts, the Wall Street newcomer could have found support at its newly-formed 20-day moving average. Despite a 6% year-to-date deficit, COIN is up 7.8% in the last month.

 

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