KONSKIE, POLAND - November 03, 2018: Coinbase Pro cryptocurrency exchange logo on smartphone
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 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.
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.
This post was last modified on Nov 03, 2022, 08:35 GMT 08:35