On Tuesday, Coinbase’s stock price increased by 1.4% as investors anticipated the launch of the predictions market.
Summary
- Coinbase’s stock price has shown a death cross pattern on the daily chart.
- The company is set to reveal the predictions market launch today.
- Base, its layer-2 network, will also make an announcement today.
Coinbase shares were trading at $252.70, close to its lowest point since December 1, falling over 43% from its peak this year. Its market capitalization has declined from more than $90 billion in July to $68 billion today.
In recent months, Coinbase’s stock has dropped significantly due to the ongoing crypto market downturn, with Bitcoin (BTC) falling from a year-to-date high of $126,200 to a current price of $85,000. The overall market cap of cryptocurrency has decreased from a peak of $4.28 trillion to $2.96 trillion.
Typically, Coinbase and other exchanges experience low trading volumes during price declines. Data from Yahoo Finance indicates that the average revenue forecast for the current quarter is $1.96 billion, down 13.87% compared to the same quarter last year.
Analysts anticipate that the company’s earnings per share will reach $1.06, a decrease from $4.68 for the same quarter last year.
Coinbase is also contending with rising competition from firms like SoFi, Vanguard, and Charles Schwab, which are rolling out their own crypto solutions.
The upcoming launch of the predictions market at the ‘Coinbase System Update’ event is expected to be a significant catalyst for the Coinbase share price. Analysts believe this product will be launched in partnership with Kalshi, the leading player in the market.
This launch is timely, coinciding with a booming predictions industry that has driven Kalshi’s valuation to over $11 billion. Its main competitor, Polymarket, also secured funding at a valuation of between $11 billion and $15 billion.
Additionally, Base, Coinbase’s layer-2 network, is expected to announce the roadmap for the $BASE token launch, a step that could enable the company to monetize its investment.
Coinbase Stock Price Technical Analysis
The daily chart reveals that the Coinbase stock price has faced pressure in recent months.
It has fallen below the crucial support level of $290, its lowest point on August 5 this year, which also marked the neckline of a double-top pattern.
Currently, Coinbase stock has formed a death cross pattern, as the 50-day and 200-day Exponential Moving Averages have crossed.
Consequently, the most likely scenario suggests that the stock may continue to decline over the next few days, with the next key target set at $231, its lowest level. A fall below this point could indicate further downside, potentially reaching the psychological level of $200.
