Coinbase stock price analysis: Will it crash to $125 after earnings?

Coinbase stock price continued its strong downward trend this year, reaching its lowest level since April last year. COIN dropped to $166, down by 62% from its all-time high. This article explores what to expect as the stock continues its downward momentum.

Coinbase stock has crashed amid the ongoing crypto sell-off

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COIN stock price continued its strong downward trend this year as investors reacted to the ongoing crypto market crashthat has affected Bitcoin and most altcoins. Bitcoin price dropped to $72,000, and most traders on Polymarket believe that the coin will drop to $70,000 soon.

Coinbase is directly impacted by the ongoing crypto market crash. For one, the company holds 14,548 coins currently worth over $1 billion and its average cost is $71,465. At Bitcoin’s peak, these coins were worth over $1.8 billion.

Coinbase stock has crashed because the ongoing crypto market plunge has led to a drop in its volume that the network handle. This is important as Coinbase still makes most of its money from transactions. Its transaction revenue rose to over $1 billion, much higher than the subscription and services revenue rose to $746 million.

Coinbase earnings ahead

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The next important catalyst for the Coinbase stock price will be the upcoming earnings report, which will come out next week. Wall Street analysts believe that its growth was limited in the fourth quarter.

Data compiled by Yahoo Finance shows that the revenue dropped by 18% in the fourth quarter to over $1.86 billion. If this happens, the annual revenue will be $7.27 billion, up by 10% YoY.

Analysts expect the company’s first quarter revenue will be $1.91 billion, down by 6%YoY. The annual revenue is expected to be $8.2 billion, up by 13% YoY. However, chances are that the company’s reports will differ from this guidance as it is normally affected by the prices of cryptocurrencies.

Analysts are slashing the Coinbase stock forecast

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Wall Street analysts are getting bearish about the Coinbase stock. For example, Compass Point’s Ed Engel downgraded the stock to sell and reduced the target from $230 to $190.

Rothschild’s Nicholas Watts reduced the target from $404 to $403, while Piper Sandler slashed from $350 to $270. More analysts, including those from China Renaissance, Jefferies, and Oppenheimer, slashed their estimates. The consensus estimate for Coinbase’s stock forecast is $356, down from $397 three months ago.

COIN stock price technical analysis

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Coinbase stock chart | Source: TradingView

The daily timeframe chart shows that the COIN stock price has been in a strong downward trend since July last year. It has dropped from a peak of $443 in July to the current $168.

The stock moved below the key support level at $225, its lowest level in December last year. It has remained below the 50-day and 100-day Exponential Moving Averages (EMA).

On the positive side, the Relative Strength Index (RSI) has crashed to 18, its lowest level since May 2022. It has moved below the Strong, Pivot, Reverse level of the Murrey Math Lines tool.

Therefore, the most likely scenario is where the stock drops to the key support level at $141, its lowest level in August 2024 and April 2025. A move below that level will point to more downside, potentially to the ultimate support level of $125.

On the positive side, the stock will bounce back later this year when the crypto market rebound starts.