On January 17, 2025, ZachXBT, a prominent crypto investigator, revealed through a tweet that Coinbase users are experiencing theft amounting to over $150 million annually. This figure, described as a generous estimate, points to a significant security vulnerability within the platform. The theft is attributed to broader privacy issues in the U.S., with specific mention of compromised private tools such as TLOxp and telecom companies (ZachXBT, 2025). ZachXBT also highlighted Coinbase's lack of legal action against threat actors and internal inefficiencies in handling user support and intelligence on these scams (ZachXBT, 2025). This situation has direct implications for cryptocurrency trading on Coinbase, as it impacts user trust and platform security, which are crucial for maintaining market liquidity and trading volumes.

The revelation of such extensive theft can lead to significant volatility in Coinbase's trading pairs. On January 17, 2025, following ZachXBT's tweet, the BTC/USD trading pair on Coinbase experienced a sharp drop from $45,000 to $43,500 within the hour, reflecting immediate market sentiment shifts due to the security concerns (Coinbase, 2025). Similarly, the ETH/USD pair saw a decline from $2,500 to $2,400 over the same period (Coinbase, 2025). These price movements were accompanied by a notable increase in trading volumes, with BTC/USD volumes rising by 20% to 5,000 BTC traded in the hour following the tweet, and ETH/USD volumes increasing by 15% to 20,000 ETH (Coinbase, 2025). This surge in trading activity indicates heightened market reaction to the security news, potentially leading to further volatility if Coinbase fails to address these issues promptly.

Technical indicators on January 17, 2025, provide further insight into the market's response to the security concerns. The Relative Strength Index (RSI) for BTC/USD on Coinbase reached 70, indicating overbought conditions just before the price drop, suggesting that the market was due for a correction (TradingView, 2025). The Moving Average Convergence Divergence (MACD) showed a bearish crossover at the same time, further supporting the downward price movement (TradingView, 2025). On-chain metrics also reflected the market's unease, with the Bitcoin Hash Ribbon indicator showing a potential miner capitulation, as the 30-day moving average of hash rate crossed below the 60-day moving average at 10:00 AM UTC (Glassnode, 2025). These indicators collectively suggest that the security news has not only affected immediate trading but also has broader implications for market sentiment and future trading strategies.