Yesterday, when Coinbase faced an outage, the stock price level fell from $205 to $195, causing a drop of about 5%.
Coinbase has recently found itself at the center of multiple controversies: A massive withdrawal of $1 billion worth of Bitcoin, a significant outage affecting users, and a technical issue wiping $100 billion worth of Bitcoin wealth.
The Billion Dollar Exodus
Recently, Coinbase experienced a massive Bitcoin outflow, with approximately 16,000 BTC, valued at approximately $1 billion, withdrawn in a single transaction. This event marked one of the largest recalls the platform has ever witnessed.
Confirmation from several analytics platforms, including Santiment, Arkham Intelligence, and Coinglass, validated the massive drop in Coinbase’s Bitcoin holdings.
This withdrawal came amid a Bitcoin bull run, with the cryptocurrency’s value rising well above $60,000, indicating a possible change in investor sentiment or a strategic move by a major player in the market.
Cut in the Mist of a Wave
Adding to the drama, Coinbase suffered a significant outage that left some users unable to access their accounts, witnessing zero balances and facing issues with buying or selling. The outage, attributed to an unprecedented surge in traffic as Bitcoin surpassed the $63,000 mark, highlighted the platform’s vulnerabilities. Brian Armstrong, co-founder and CEO of Coinbase, admitted that the platform was tested beyond its limits, with traffic increases exceeding ten times the expected volume. His post on X reads as follows:
“Apps are now recovering.
We had modeled a ~10x surge in traffic and load tested it. This exceeded that number.
It’s expensive to keep services over-provisioned, but we’ll need to keep working on auto-scaling solutions, and killing any remaining bottlenecks. Thank you for bearing with us.”
The 100 Billion Dollar Problem
Adding to the turmoil, a Coinbase outage wiped out an estimated $100 billion in Bitcoin wealth in less than 60 minutes. The ruling caused panic among traders as they saw their balances drop to zero, causing the value of Bitcoin to drop from $64,300 to $59,461.
Although Coinbase assured its users that their assets were safe and the account balance display issues had been restored, the rapid loss of market capitalization and the temporary prevention of Bitcoin from breaking its 2021 all-time high left a lasting impact on investor confidence.
Impact on Coinbase (COIN) Stock
A chart published by TradingView shows the 15-minute price action for Coinbase Global Inc. (NASDAQ: COIN) on March 1, with data points at the close of each 15-minute interval. The chart includes four exponential moving averages (EMAs) with periods of 20 (red line), 50 (orange line), 100 (blue line), and 200 (brown line).
Yesterday, when the stock market faced a disruption, the stock price level fell from $205 to $195, causing a drop of about 5%. At the time of the last data, 08:45 UTC+5:30, the stock was trading at $202.71, a slight drop of 0.29%.
The stock opened the session above the 200 EMA, indicating a bullish signal. However, throughout the trading period, the stock price oscillated around the EMAs, suggesting a lack of clear directional momentum, as reflected by the crossing of the 20-day and 50-day EMAs.
The overall trading pattern shows some volatility with multiple crossovers over the EMA lines. Still, the stock price’s proximity to the EMAs suggests a consolidating market. The RSI near 50 reinforces this view, indicating that traders could be waiting for more signals before committing to a clearly bullish or bearish stance.
By Leonardo Perez
