- Summary:
- Coinbase stock price retreated to the lowest level since September 22. What next for the COIN share price after earnings
Coinbase stock price retreated to the lowest level since September 22. The shares were trading at $60.95, which was about 47% below the highest level in September. It has dropped by more than 83% from the year-to-date high, giving it a market cap of over $14 billion.
Coinbase earnings preview
Coinbase stock price has been in a downward trend in the past few months as cryptocurrency prices have crashed in the past few months. Its daily volume has crashed to about $3 billion while the number of users in the platform has dropped sharply. The company had 9 million monthly active users in the second quarter.
In the second quarter, the company saw its revenue drop by 63% to $808 million. It even turned into a loss of 87 cents as its trading volume came in at $217 billion. Its transaction revenue dropped by 35% to $655 million. In total, Coinbase had an EBITDA loss of over $151 million and a net loss of over $1.1 billion.
Unfortunately, the situation likely worsened as the prices of cryptocurrencies crashed. Bitcoin remained in a tight range during the third quarter, which likely hurt the company’s earnings. As such, analysts expect that the company’s revenue dropped from $803 million in Q2 to over $641 million in Q3. Its losses are also expected to increase from 87 cents to $2.38 per share.
Coinbase stock price forecast
The daily chart shows that the COIN share price has been in a bearish trend in the past few days. It has crashed below the 50-exponential moving averages while the Relative Strength Index (RSI) has crashed below the neutral point at 50. The shares have formed what looks like a head and shoulders pattern.
Therefore, I suspect that the Coinbase share price will have a bearish breakout after its earnings. If this happens, the stock will likely retest the key support level at $43. A move above the resistance at $67 will invalidate the bearish view.
