The big cut in profit expectations still received an outperforming rating. Does the W bottom pattern indicate a reversal?

According to Woofun AI, investment bank William Blair maintained its “outperforming the market” rating while drastically lowering Coinbase (COIN.US) profit expectations. This seemingly contradictory operation triggered the market to think deeply about the future trend of Coinbase.

Despite the agency's cut in financial forecasts, the stock prices of Coinbase and Circle (CRCL.US) bucked the trend and rose by about 3-4% after the news was announced, showing the market's optimistic interpretation that the gap had run out. William Blair's core logic is that the current negative factors are fully reflected in stock prices, and investors should continue to hold and wait for the spot cryptocurrency trading volume to recover after it hits the bottom at the same time as Bitcoin.

This contrast of maintaining optimistic ratings in the context of data downgrades has established Coinbase's special position as the anchor of the current market narrative.

William Blair deeply disassembled Coinbase's financial model, and the exact extent of the adjustments revealed the agency's prediction of short-term pain. Analysts Andrew Jeffrey and Adib Choudhury indicated that the company's earnings will bottom out in the second half of 2026 and then enter a recovery channel in 2027. At the specific data level, the agency lowered Coinbase's 2026 revenue forecast by 12% and the 2027 revenue forecast by 13%; more significantly, after two years of adjustment, EBITDA expectations were drastically cut by 34%. In terms of volume forecasting, William Blair expects Coinbase's total trading volume to drop by about 44% to $669 billion, but the volume will rebound by more than 32% in 2027.

Notably, the agency believes that there are structural differences between the current cycle and 2022. The landing of spot Bitcoin ETFs, the continued entry of institutional funds, and the improvement of the industry's regulatory framework constitute favorable conditions that did not exist four years ago. In terms of business growth points, the report is particularly optimistic about Coinbase's Ethereum second-tier network Base, believing that it is expected to become the core profit engine. At the same time, the derivatives and prediction markets will further broaden revenue sources, making the business no longer simply rely on spot trading. The retail derivatives business alone surpassed $200 million in annualized revenue in the first quarter, showing the initial results of the diversification strategy.

The market view is not one-size-fits-all. Other institutions are cautious about COIN's short-term trend, while technical signals present a complicated game pattern. Iper Sandler analyst Patrick Moley lowered the COIN price target from $170 to $155 and maintained a neutral rating. Patrick Moley said that the core focus of the second quarter was predicting the market and perpetual contracts. The World Cup led to a sharp rise in the predicted market size, but he also warned that in the third quarter, the market will pay close attention to the potential competitive impact brought about by perpetual contracts. Since this year, COIN's stock price has fallen by nearly 30%, and Bitcoin fell by about 26% during the same period. The performance of the two is highly convergent.

Meanwhile, Circle (CRCL) landed on the NYSE in June 2025 at an offering price of $31, and its stock price has dropped 20% since the beginning of the year. In the field of technical analysis, John Bollinger, the inventor of the global volatility indicator Bollinger Bands, has continued to suggest that Bitcoin's daily line is building a key bottom pattern since the beginning of July. On July 2, Bollinger posted an article on social networking platform X, pointing out that the market had broken out of the “W” double-bottom reversal structure: the two lows formed a volatile range, and there was a rebound in the middle. Once the price broke through the resistance level in the middle of the double bottom, the bullish trend was officially established.

He said that the current trend is a standard fractal structure. Small W bases are nested inside the large shape, and the same structure can also be seen at the weekly level. However, he also objectively hinted at uncertainty. The current bear market had many bullish patterns, and in the end, they were all broken by sell-off pressure. In the latest news, Bollinger said that if the current W bottom construction is completed, it will be regarded as a clear sign of trend reversal. This is also his clearest bullish signal so far, and the market is no longer just a short-term rebound. Earlier this year, Bollinger revealed that its investors hold long positions in Bitcoin, and their views are consistent with their holdings. Judging from major technical trends, the overall bearish pattern of Bitcoin has not been reversed, but the downward momentum continues to decline.

According to data compiled by Woofun AI, the latest weekly research report from on-chain data agency Glassnode shows that the main source of selling pressure in the market throughout the year — fear sell-off from long-term holders — peaked and declined two weeks ago. The indicator excludes intra-chain transfer interference and counts the actual sales volume of long-term holders. The current cycle showed an inflection point downward for the first time. The low price in June attracted a large number of buyers, and Glassnode detected that wallets of various sizes were collectively bottom-up to store coins. The negative correlation between Bitcoin and the US Dollar Index (DXY) deepened. Linkage with US stocks continued to weaken, and favorable macroeconomic news returned in sensitivity to currency prices: Tuesday's inflation data fell short of expectations, and Bitcoin's increase far exceeded major US stock indices. For on-chain analysts and Wall Street institutions, one of the core issues is that the Bitcoin spot market has yet to see continuous buying, which is not enough to confirm a reversal. Derivatives positions continued to close and leave, long-term selling pressure gradually weakened, and the options market feared that premiums had narrowed, but incremental capital did not enter the market on a large scale. William Blair judged the inflection point in 2027 and predicted that after a sharp drop of 44% this year, Coinbase's trading volume will rebound 32% next year.

Despite peaking pressure and improving technical patterns, the market is still gaining momentum due to the lack of continuous promotion of incremental capital. The real reversal may have to wait for a fundamental improvement in the macro-liquidity environment.