Coinbase shares have plunged 30% this year, and Wall Street believes they are nearing a bottom

Original author: Jose Antonio Lanz

Original translation: Chopper

Despite lowered earnings expectations, stock prices moved higher. Yesterday, shares of Coinbase (COIN) and Circle (CRCL) both rose by approximately 3-4%. This followed a report from Chicago-based investment bank William Blair that revised downward its revenue and earnings forecasts for Coinbase, while maintaining an "Outperform" rating.

William Blair's core view is that the current negative factors are already fully priced into the stock, and investors should continue to hold Coinbase.

The firm lowered its 2026 revenue estimate for Coinbase by 12% and its 2027 revenue estimate by 13%; its adjusted EBITDA forecasts for both years were slashed by 34%. Analysts Andrew Jeffrey and Adib Choudhury stated that the company's earnings will bottom out in the second half of 2026 and recover in 2027. They advise investors to continue holding Coinbase as spot cryptocurrency trading volumes bottom out alongside Bitcoin.

William Blair predicts that Coinbase's total annual trading volume will decline by approximately 44% to $669 billion, before rebounding by over 32% in 2027.

The firm believes there are structural differences between the current cycle and 2022. Factors such as the launch of spot Bitcoin ETFs, sustained institutional capital inflows, and a more comprehensive industry regulatory framework are bullish conditions that did not exist four years ago.

The report also holds a positive view of Coinbase's Ethereum Layer 2 network, Base, considering it a potential core driver of earnings growth. Derivatives and prediction markets further broaden revenue streams, making the business less reliant solely on spot trading. The retail derivatives business alone generated an annualized revenue of over $200 million in the first quarter.

Not all institutions are bullish on COIN's short-term trajectory. Piper Sandler analyst Patrick Moley lowered his price target for COIN from $170 to $155, maintaining a Neutral rating. He noted that the key themes for the second quarter are prediction markets and perpetual contracts, with the World Cup driving a surge in prediction market volume. He also cautioned that the market will be highly focused on potential competitive pressures from perpetual contracts in the third quarter.

COIN's stock price has fallen nearly 30% year-to-date, compared to Bitcoin's decline of about 26% over the same period. Circle listed on the New York Stock Exchange in June 2025 at an issue price of $31, and its stock price has retreated 20% since the beginning of the year.

"W" Bottom Pattern Forms: John Bollinger Predicts Imminent Major Bitcoin Rally

Technical indicators are also showing optimistic signals. John Bollinger, the creator of the widely-used Bollinger Bands volatility indicator and a seasoned technical analyst, has been consistently pointing out since early July that Bitcoin's daily chart is forming a key bottoming pattern.

On July 2nd, Bollinger posted on social platform X, noting that the price action was forming a "W" double-bottom reversal structure: two lows creating a trading range, with a bounce in between. If the price breaks through the resistance level between the two lows, an uptrend would be officially confirmed.

He described the current price action as a standard fractal structure, with a smaller W-bottom nested within the larger formation, and that the same structure is visible on the weekly timeframe. However, he also objectively acknowledged the uncertainty: this bear market has seen multiple bullish patterns emerge, only to be eventually overwhelmed by selling pressure.

In his latest update, Bollinger stated that if this W-bottom completes, it will be considered a clear signal of a trend reversal. He called this his most definitive bullish signal to date, suggesting the move is not merely a short-term bounce but a shift in the broader trend.

Earlier this year, Bollinger disclosed that his investment entity holds a long Bitcoin position, aligning his views with his holdings. Observing the major technical trend, Bitcoin's overall bearish structure has not yet reversed, but downside momentum is consistently weakening.

Has Bitcoin's Bottom Already Arrived?

Glassnode's latest weekly report indicates that the market's primary source of selling pressure this year – panic selling by long-term holders – peaked two weeks ago and has since declined. This metric, which filters out internal transfer noise, shows the actual amount of Bitcoin sold by long-term holders, and this cycle marks the first time it has turned downward from a peak.

Price lows in June attracted significant buying activity. Glassnode monitored wallets of various sizes collectively accumulating coins. Bitcoin's negative correlation with the US Dollar Index has deepened further, while its correlation with US stocks continues to weaken. The sensitivity of Bitcoin's price to positive macroeconomic news has returned: following weaker-than-expected inflation data on Tuesday, Bitcoin's price surge far outpaced major US stock indices.

For on-chain analysts and Wall Street institutions, a core question remains: sustained buying pressure has not yet appeared in the Bitcoin spot market, which is insufficient to confirm a reversal of the trend.

Derivatives positions continue to be unwound and closed out, long-term selling pressure is gradually diminishing, and the fear premium in the options market is narrowing. However, significant new capital inflows have not materialized. William Blair forecasts the inflection point in 2027, predicting that after a 44% plunge in trading volume this year, Coinbase's volume will rebound by 32% next year.