Analysts are warning that Coinbase could be entering a downtrend after the stock scored a six-day-long advance. The crypto exchange operator finished almost 1% higher Tuesday at $171.68 per share and notched its longest string of gains since early March, around the time that bitcoin hit an all-time high. During the latest rally, Coinbase climbed 6.3% from Sept. 16 through Tuesday. In early trading Wednesday, Coinbase rose as much as 1.3%, paving the way for what may be its seventh straight gain. What is worrying now for technical analysts who watch price charts, however, is that earlier this week, Coinbase’s 50-day moving average dipped below its 200-day moving average, forming a dreaded ” death cross ” that can signal potential downside risk ahead. “Coinbase looks very toppy to me as the recent bounce out of the oversold condition looks to be stalling out,” Wolfe Research macro strategist Rob Ginsberg told CNBC. “Looks like it wants to revisit the recent lows of $146, with a break there bringing $115 into play. I would continue to fade rallies in this vulnerable looking name.” Ginsberg’s $146 target equals a 15% decline for Coinbase, while $115 would amount to a 33% slide. COIN 5D mountain Coinbase rallies for a sixth day in a row Will Tamplin, senior analyst at Fairlead Strategies, said the death cross is a lagging indicator of negative momentum and that although support near $165 “has generated stabilization recently for COIN … a loss of long-term upside momentum increases risk of an eventual breakdown and continuation lower.” The next major support level for Coinbase is near $128, or 25% below Tuesday’s close, Tamplin added. For the year, Coinbase is down about 2.9%, falling into a bigger downtrend and underperforming relative to bitcoin since July. That may be partly due to the lack of price action and volatility in bitcoin, according to Owen Lau, an analyst at Oppenheimer. Lau also cited muted trading volume on crypto exchanges and pressure on subscription and services revenue due to the declining interest rate outlook. But cryptocurrency “trading volume could jump” when interest rates move even lower and if bitcoin again challenges its all-time high, Lau noted. Bitcoin has been stuck in a range between $55,000 and $70,000 for much of the year, and is currently changing hands at about $64,000. But Tamplin said short-term overbought conditions are a headwind and that he expects the flagship cryptocurrency to stay within this year’s range. — CNBC’s Nick Wells contributed reporting.
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