Coinbase Stock Slumps 30% Yet Wall Street Holds Outperform Rating Amid Technical Hope

Woofun AI reports that Coinbase (COIN) retains an 'outperform' rating from investment bank William Blair, despite significant forecast cuts, a stance articulated by analyst Jose Antonio Lanz and compiled by Chopper for Foresight News. This divergence between deteriorating financial projections and sustained bullish institutional sentiment creates a paradoxical market dynamic, where the immediate price action contradicts the long-term strategic assessment of the firm’s valuation.

The immediate market reaction has been modestly positive, with shares of Coinbase (COIN) and Circle (CRCL) both increasing by around 3–4% yesterday. This slight uptick occurred against a backdrop of broader sector volatility, suggesting that investors are digesting the revised outlooks without triggering a panic sell-off. The synchronized movement of these two major crypto-infrastructure stocks indicates a shared sensitivity to macro-level liquidity shifts rather than company-specific news alone.

Structurally, William Blair’s rationale for maintaining its rating rests on the premise that all current negative factors have already been reflected in the stock price. The bank lowered its revenue forecast for Coinbase in 2026 by 12% and for 2027 by 13%, while EBITDA forecasts for both years were reduced by 34% after these adjustments. By pricing in these severe contractions, the analysts argue that the downside risk is largely mitigated, leaving room for upside as the cycle matures. This approach assumes that the market has overreacted to short-term headwinds, creating a value trap for sellers but an opportunity for long-term holders.

Analysts Andrew Jeffrey and Adib Choudhury project that the company’s profits will bottom out in the second half of 2026 before recovering in 2027. They advise investors to keep holding Coinbase as spot cryptocurrency trading volumes reach their lows alongside Bitcoin prices. William Blair predicts that Coinbase’s total annual trading volume will decline by about 44% to $669 billion, before rebounding by over 32% in 2027. This V-shaped recovery expectation hinges on the cyclical nature of crypto markets, where extreme lows in activity are often followed by explosive growth phases driven by renewed retail and institutional interest.

The firm believes there are structural differences between this cycle and that of 2022, citing the availability of spot Bitcoin ETFs, continuous inflow of institutional funds, and an improving regulatory framework as positive factors that did not exist four years ago. These elements provide a more stable foundation for revenue generation, reducing reliance on volatile spot trading fees.

Furthermore, the report is optimistic about Coinbase’s Ethereum Layer 2 network, Base, which is seen as a potential key source of profit growth. Derivatives and prediction markets will further diversify revenue streams, allowing the company to rely less on spot trading alone. Just the retail derivatives business generated annualized revenue of over $200 million in the first quarter, demonstrating the viability of these new verticals.

Woofun AI data shows that not all institutions are bullish on COIN’s short-term performance, however. Jefferies analyst Patrick Moley lowered his target price for COIN from $170 to $155, maintaining a neutral rating. He said the key focus in the second quarter lies in prediction markets and perpetual contracts, noting that the World Cup will drive a surge in the size of prediction markets. While this event-driven volume spike is welcome, Moley warned that the market will pay close attention to the potential competitive impact of perpetual contracts in the third quarter. This caution highlights the fragility of derivative-driven revenues when faced with intense competition and shifting user preferences.

Since the beginning of the year, COIN’s stock price has fallen by nearly 30%, compared to around 26% decline in Bitcoin prices during the same period. This underperformance relative to the underlying asset suggests that equity investors are penalizing Coinbase for its operational leverage and fee structure. Circle went public on the NYSE in June 2025 at an issue price of $31, and its stock price has dropped by 20% since the start of the year. The parallel decline in Circle’s valuation reinforces the narrative that the entire crypto-equity sector is undergoing a re-rating, with investors demanding higher certainty before committing capital.

Optimistic signals can also be seen from a technical perspective, with John Bollinger predicting a significant rise in Bitcoin prices. The inventor of the globally used volatility indicator Bollinger Bands has been indicating since early July that Bitcoin’s daily chart is forming a key bottom pattern. On July 2, Bollinger posted on social media platform X, pointing out that the market has formed a 'W' double-bottom reversal structure: two low points created a range, with a rally in between. Once prices break through the resistance level at the center of the double bottom, a bullish trend will be officially established. He described the current trend as a standard fractal structure, with smaller 'W' bottoms nested within the larger one, and the same pattern can be observed on the weekly chart as well.

However, Bollinger also acknowledged the uncertainties, noting that multiple bullish patterns have appeared during this bear market, only to be broken by selling pressure. In his latest updates, he said that if this 'W' bottom is completed, it will be seen as a clear signal of trend reversal—a very strong bullish signal so far, indicating that the market move is not just a short-term rally. Earlier this year, Bollinger revealed that his investment entity holds long positions in Bitcoin, aligning his views with his actual holdings. This skin-in-the-game approach adds credibility to his technical analysis, as he stands to lose capital if his predictions fail.

From a broader technical perspective, the overall bearish trend for Bitcoin has not yet reversed, but the downward momentum is gradually weakening. The latest weekly report from on-chain data firm Glassnode shows that the main source of selling pressure in the market throughout the year—panic selling by long-term holders—reached its peak two weeks ago and has since started to decline. This indicator excludes interference on-chain transfers and tracks the actual selling volume of long-term holders, showing a downward turn for the first time in this cycle. The price lows in June attracted a large number of buyers, and Glassnode observed wallets of various sizes collectively buying assets at low prices.

The negative correlation between Bitcoin and the DXY has deepened, and its linkage with U.S. stocks has continued to weaken. The market’s sensitivity to positive macroeconomic news has returned: when inflation data came in below expectations on Tuesday, Bitcoin’s rise was much greater than that of major U.S. stock indices. This decoupling suggests that Bitcoin is beginning to trade on its own fundamentals rather than as a proxy for risk-on assets.

For on-chain analysts and Wall Street firms, a key question remains: there has been no sustained buying interest in the Bitcoin spot market, which is not enough to confirm a reversal in the trend. Derivatives positions are being closed off continuously, long-term selling pressure is gradually decreasing, and the panic premium in the options market is narrowing, but no significant new capital has flowed into the market. William Blair believes the turning point for the market will come in 2027, predicting that after a 44% drop in Coinbase’s trading volume this year, it will rebound by 32% next year.