Investors missed the incredible recovery in Bitcoin (BTC-USD) after 2022’s non-stop crypto bankruptcy news. FTX led to the capitulation in Bitcoin prices, which found support in the $16,700 range since early Nov. 2022.
At around $23,500, Bitcoin is completing a cup formation. $25,000 is the next breakout point. This is a price not seen since mid-Aug. 2022. Bitcoin’s leadership in the crypto market is squeezing Coinbase (COIN) short-sellers. Bears crowded their bet against the platform with a 25% short position.
Is COIN stock a sell or a hold from here? COIN stock failed to break out of its $80 rally point. It struggled throughout last summer to rise from there. Fundamentally, Coinbase’s crypto platform offering is not attractive. The more fearful crypto investors get, the lower the trading volume.
On Jan. 10, Coinbase cut 25% of its staff or around 950 people. This triggers a $149 million to $163 million restructuring charge. It includes a $91 million to $95 million stock-based compensation expenditure.
Markets are betting that the cost cut will align revenue to costs. This view depends on Bitcoin. Large Bitcoin investors accumulated a position at the lows. Once they dump their position to retailers, Coinbase could find its business struggling again.
