Short interest has hit highs, resulting in a "Squeeze Score" of 82 with the rally; however, similar readings occurred last year without triggering an actual squeeze.

Coinbase stands as the largest U.S. cryptocurrency exchange and notably holds 12% of all Bitcoin.

The stock has been exceptionally volatile, posting a 103% return last spring and a staggering 391% return in 2023.

This year, the return is a negative 11%, with Bitcoin down 8% and the S&P 500 remaining largely unchanged.

COIN shows a 0.60 correlation with Bitcoin, but is also tightly correlated to the S&P at 0.52, reflecting its status as a high-beta risk asset. It maintains a 0.69 correlation with HOOD, though our crowded shorts data suggests HOOD is not currently a crowded trade.

COIN’s short interest almost doubled at the beginning of the year, breaking out of its historic range and signaling a sharp shift in short selling sentiment.

The crowded shorts data is now at 50, a new high. Combined with the recent bear market rally, the S3 short squeeze score has hit 82, indicating elevated short squeeze risk. The squeeze score is calculated as a composite of the crowded score plus recent price returns.

Interestingly, the squeeze score climbed above 70 three times last year, but the stock never actually squeezed.

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The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.

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