Coinbase's profits soar as crypto prices rise (05/14/2024)
Hello, everyone! This week, our spotlight is on Coinbase Global, Inc. $Coinbase(COIN.US)$, the largest cryptocurrency exchange in the US. We’ll explore the latest trends and take a close look at the company's recent market activity.
What’s new?
On May 2, 2024, Coinbase reported its first-quarter earnings report after the bell, surpassing estimates on both earnings and revenue.
According to FactSet, the company reported first-quarter earnings per share of $4.40, compared to analyst estimates of $1.15. Additionally, the company reported revenue of $1.64 billion, exceeding the average estimate of $1.36 billion.
Coinbase reported a net income boost from $737 million in pre-tax mark-to-market gains on mostly unrealized crypto assets. This gain was driven by Bitcoin’s strong performance, rising from around $44,000 at the start of the year to as high as $73,000 in March.
Coinbase has gained favor with analysts recently. As of now, only about 20% of analysts tracked by FactSet rate it as Sell or Underweight, down from 41% in January. Most analysts rate Coinbase as Hold, with a price target of around $239.
Despite positive earnings, Coinbase shares have declined over 10% as of May 14, 2024.
While major institutional enthusiasm for Bitcoin, spurred by SEC approval of Bitcoin ETFs, has boosted the company’s performance, fundamental concerns remain. Rising competition from low-cost stock trading platforms and ongoing legal threats pose major risks to Coinbase’s business.
Chart of the day
Trend analysis:
In early February 2024, Coinbase's stock (COIN) began a robust uptrend after the U.S. Securities and Exchange Commission (SEC) approved the listing and trading of the first spot bitcoin exchange-traded product (ETP) shares.
Within two months, COIN surged 130% to a two-and-a-half-year high of $283.
However, the stock has since trended downward, giving back roughly 50% of its prior gains, as shown in the Fibonacci retracement tool.
Technical indicators:
The daily chart of COIN suggests a head and shoulders formation, with the volume decreasing from the left shoulder to the right shoulder, indicating a potential trend reversal to the downside.
A bearish crossover signal has occurred on the 20- and 50-day moving averages (MA20 and MA50), suggesting a short-term bearish sentiment.
COIN is currently trading between two downward sloping trendlines, forming a falling wedge pattern. This could indicate a potential price rebound in the short term.
Next move?
Coinbase’s near-term performance will likely fluctuate with the cryptocurrency market. Key levels to watch are the 50% ($198) and 61.8% ($180) Fibonacci retracement levels, where price rebounds may occur. A breakout below the 61.8% level could indicate a bear market.
This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve.
All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more
