Coinbase’s Death Cross Indicator Raises Investor Concerns

Coinbase Global Inc. COIN has recently recorded a Death Cross, a technical signal that often raises alarms among bullish investors.

This event occurs when the stock’s 50-day simple moving average (SMA) falls below the 200-day SMA, historically marking the onset of bearish momentum.

However, before committing to a shorts strategy against Coinbase’s stock, it’s important to consider the full context.

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Current Technical Setup: Bearish or Oversold?

Over the past year, Coinbase stock has faced significant declines, dropping 31.59%. Year-to-date, it is down 33.61%, and just within the last month, it has lost 19.66% of its value.

Trading at $172.79, the stock is significantly below key moving averages: an eight-day SMA of $178.71, a 20-day SMA of $185.02, a 50-day SMA of $227.70, and a 200-day SMA of $230.43.

From a technical perspective, this trend suggests a bearish outlook.

Yet, there are conflicting indicators. The Moving Average Convergence Divergence (MACD) currently indicates a bearish sentiment at -13.68. Conversely, the Relative Strength Index (RSI) is at 37.84, which is perilously close to the oversold range and may attract potential dip buyers.

Institutional Developments: XRP Futures on the Way

Coinbase Institutional is also making significant moves with plans to enter the derivatives market. The company has filed with the Commodity Futures Trading Commission (CFTC) for the upcoming launch of XRP XRP/USD futures, as reported by Coindesk.

Scheduled for launch on April 21, these cash-settled futures (trading under the ticker XRL) will provide a regulated avenue for gaining exposure to the often-volatile digital asset. This development could significantly boost institutional interest.

What Lies Ahead for COIN?

Is COIN stock‘s recent Death Cross a precursor to further declines?

While the technical indicators raise concerns, there is still buying pressure, and the upcoming XRP futures could restore some investor enthusiasm.

With sentiments mixed, traders might consider waiting for additional confirmation before executing their next trading decisions.

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