COIN Stock Rises With Bitcoin Above $72K – Short Interest Has Nearly Doubled This Year

• COIN’s stock rallied as much as 3% in early morning trade after Bitcoin’s price crossed $72,000.
• According to Leon Gross, director of research at S3 Partners, Coinbase’s crowded shorts indicator has climbed to 50, the highest level recorded for the stock.
• The increase in short positioning has pushed Coinbase’s “squeeze score” to 82, though the metric exceeded 70 three times last year without triggering an actual squeeze.
• Despite the recent rally, Coinbase shares remain down about 11% year to date, trailing both Bitcoin and the broader market.

Coinbase (COIN) shares rose in early trading Friday after Bitcoin (BTC) crossed $72,000, with an analyst noting that short interest in the stock has nearly doubled this year.

COIN’s stock rose nearly 3% in pre-market trade on Friday, but retail sentiment around the company on Stocktwits remained in ‘bearish’ territory over the past day, accompanied by chatter at ‘low’ levels. 

Short Interest In Coinbase Nearly Doubles

Data from S3 Partners showed bearish bets on the crypto exchange have nearly doubled since the start of the year, pushing the stock outside its historical short-interest range. The firm’s crowded shorts indicator has reached 50, the highest level recorded for Coinbase.

The jump in open interest has also pushed Coinbase’s “squeeze score” to 82, a metric S3 uses to estimate the probability that short sellers may be forced to cover positions if the stock continues to rise.

However, it’s possible that it may not happen. According to Leon Gross, director of research at S3 Partners, the squeeze score climbed above 70 three times last year, but the stock ”never actually squeezed.”

COIN Stock Lags S&P 500, Bitcoin

The report also noted that Coinbase remains highly sensitive to moves in the crypto market. S3 data showed the stock has a 0.60 correlation with Bitcoin and a 0.69 correlation with Robinhood Markets (HOOD), while also maintaining a 0.52 correlation with the S&P 500.

HOOD’s stock gained over 1% in pre-market trade on Friday. Retail sentiment around the firm on Stocktwits remained in ‘bearish’ territory over the past day. 

The SPDR S&P 500 ETF Trust (SPY) edged 0.46% higher in early morning trade and also saw retail sentiment trending in ‘bearish’ territory over the past day. It was among the top trending tickers on Stocktwits at the time of writing.

Despite Friday’s move higher, Coinbase shares are still down about 11% year to date, S3 partners noted. By comparison, Bitcoin has declined roughly 8% over the same period, while the S&P 500 has remained largely flat.

Read also: TRUMP Token Rallies Nearly 50% On Mar-a-Lago Gala Invite For Top Holders – But The President May Not Attend

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