Coinbase stock has experienced an eight-day decline, marking its longest losing streak since July, amid a continued downturn in the cryptocurrency market.

Challenges Facing Coinbase

Both decentralized and centralized exchanges are under pressure as cryptocurrency trading volumes have declined in recent months. According to data, the volume traded in decentralized exchanges (DEXs) peaked at $260 billion in March but fell to $175 billion by August. Similarly, centralized exchange (CEX) platforms saw their trading volume drop from $2.48 trillion in March to $1.2 trillion in August.

This decline in volume is attributed to the poor performance of major cryptocurrencies like Bitcoin and other altcoins. Bitcoin is in a bear market, having fallen over 23% from its peak this year. Likewise, Ethereum has decreased by 41% from its year-to-date high, and Solana is down by over 36%.

Typically, trading volume on crypto exchanges closely correlates with price movements. For instance, Coinbase saw a total volume of over $300 billion in Q1 when cryptocurrency prices were rising. This volume dropped to $226 billion in Q2 as prices fell.

Impact on Coinbase Stock

The decline in Coinbase stock aligns with the weak performance of spot Ethereum and Bitcoin ETFs. Data indicates that spot Bitcoin ETFs have experienced asset outflows for seven consecutive days. Ethereum ETFs have also seen asset outflows in six of the last seven weeks. These ETF asset flows are significant for Coinbase as it serves as the custodian for many of these funds.

Additionally, Base, Coinbase’s layer-2 network, has seen a decline in assets over the past seven days. With over $1.4 billion in assets, it ranks as the sixth-largest chain in the industry. The volume of coins traded on its DEX platforms fell by 10% to $3.06 billion, bringing its cumulative total to over $93 billion.

Technical Analysis of Coinbase Stock

From a technical standpoint, Coinbase stock has formed several bearish patterns, suggesting more downside potential. It has created a slanted double-top pattern, with its neckline at $195.40, its lowest point on May 14. The stock dropped below this neckline last week.

Moreover, the stock has moved below the 50% Fibonacci retracement level and the 200-day Exponential Moving Average. Significantly, it fell below the crucial support level at $162, its lowest point in August, invalidating a double-bottom pattern that was forming.

Given these indicators, the path of least resistance appears to be downward, with the next reference level to monitor at $137.70, the 61.8% retracement point, and 15% below the Sep. 6 level.

For more news and updates on the cryptocurrency market, visit Global Crypto News.

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