Coinbase stock plummets amidst lawsuit: What’s next for COIN?

Why is Nevada’s regulator targeting Coinbase?

Coinbase stock experienced a notable bearish movement, closing down 6%. This decline is far from insignificant: it follows direct intervention from the Nevada Gaming Control Board. The regulatory authority implicitly accuses the platform of offering products that resemble sports betting without holding the appropriate license.

At the heart of the conflict are “prediction markets”. These financial instruments, highly popular in the crypto ecosystem, allow users to speculate on the outcome of future events. For Coinbase, these are legitimate derivative products. For Nevada, it’s disguised gambling.

This distinction is crucial. If these contracts are reclassified as sports betting, Coinbase faces heavy sanctions and strict prohibition in certain key states. The market immediately reacted with massive selling, fearing this precedent could trigger a regulatory domino effect across the United States.

An accumulation of regulatory pressures for the exchange

This isn’t the first time Coinbase has had to navigate troubled waters. Already engaged in a prolonged standoff with the SEC (Securities and Exchange Commission), the company now sees a new front opening. This accumulation of FUD weighs heavily on institutional investor sentiment.

The timing is particularly delicate. As the crypto market attempts to validate a bullish reversal, legal uncertainties act as a glass ceiling for COIN stock. Analysts are now closely monitoring whether other state regulators will follow Nevada’s lead.

Despite these headwinds, the exchange’s fundamentals remain solid. Trading volumes on the platform continue to show resilience in the face of volatility. However, the threat of geographic restrictions on its innovative products could hamper its revenue diversification strategy.

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Can COIN stock recover from this new FUD?

The question burning on investors’ lips is now technical: how far can the correction go?

First and foremost, the weekly CVD shows its largest outflows since the end of the 2022 bear market. A negative signal that increases the probability of a break below the bullish trendline at $158.

If this scenario validates, COIN shares have a strong chance of returning to the demand zone (weekly order block) around $75. This represents a drop of more than 50% from its current price. The support and last major low at $144 will be essential. A break below would definitively seal COIN stock’s fate for 2026.

The coming days will be decisive. Investors must monitor two key indicators: Coinbase’s official response to regulators and the maintenance (or lack thereof) of buying volumes on the stock despite the news. The crypto market has a short memory, but regulation never forgets.

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