Coinbase stock rallies 16% as retail users stack Bitcoin and Ethereum

Coinbase stock rallied, spiking about 16% in a single session amid renewed optimism from retail cryptocurrency investors who have been accumulating Bitcoin (BTC) and Ethereum (ETH) during recent price weakness.

The stock’s rebound comes after a prolonged period of volatility for both crypto markets and Coinbase’s own share price. Coinbase’s CEO, Brian Armstrong, highlighted that many individual users continued to build up their Bitcoin and Ethereum holdings even as prices were soft.

The rally continued as retail customers either bolstered or held onto their Bitcoin and Ethereum holdings during the recent market weakness, signaling trust among regular investors. Shares of Coinbase finished at $164.32 in the last trading session, gaining $23.23 or some 16%, per market data from TradingView.

The stock rose to $141 to open the day and continued to climb throughout the session, finishing close to its intraday high. Coinbase’s rise coincided with reports that retail investors were accumulating cryptocurrencies in the recent slide. Armstrong wrote that numerous users who bought more dropped or remained in the same position despite the market’s volatility.

He referred to the trend as “buying the dip “: an investment strategy in which people buy investments after a price decline in anticipation of a rebound. Bitcoin and Ethereum accounted for most of that activity, according to him. These two cryptocurrencies typically produce the greatest trading volumes on the exchange.

Armstrong also said that retail wallet balances in February were higher than in December despite price peaks and troughs. He alleged that many users displayed what crypto-lore scholars commonly call “diamond hands,” holding onto their assets rather than selling them during downturns.

Analysts outline key price levels and targets

Market analysts have been closely watching Coinbase’s technical levels. A weekly chart for analyst Ace illustrates the stock testing major Fibonacci retracement areas, which traders use to identify potential resistance and support zones.

They conclude that the next significant level of resistance is at $186.19. In continuation of the momentum, additional resistance levels could occur at $279.10, $365.48, and $426.98. But the overall chart remains corrective unless the stock rises above $186.19 in a big game-changer.

The good news is that Coinbase remains above $125.81, which analysts view as maintaining a longer-term bullish structure. More than just technical analysis, dozens of Wall Street firms have updated prices for Coinbase. Bernstein analysts recently forecast the stock could reach $212, and, more optimistically, even $500 to hit a new all-time high.

Meanwhile, several brokerages have cut their price expectations while maintaining positive or neutral ratings. H.C. Wainwright set one of the highest targets at $350, while Barclays set one of the lowest at $148.

Canaccord Genuity lowered its goal from $400 to $300. BTIG cut its target to $280. Benchmark cut its forecast to $267, and Goldman Sachs lowered its forecast slightly to $264. Other companies made comparable adjustments. J.P. Morgan lowered its valuation to $252, and Deutsche Bank revised it to $250.

Rosenblatt and Needham lowered their estimates to $240 and $230, respectively. Baird revised its rating to Neutral with a target of $165, while Piper Sandler set its target at $150.

Earnings miss, and insider sales draw attention

After a stock rally over the past month and favourable trends for retailers in the retail sector, Coinbase’s most recent earnings report showed weaker-than-expected results. In the fourth quarter through December 31, the company posted a net loss of $666.7 million.

The numbers lagged Wall Street expectations, adding another layer of complexity to the stock’s prospects. Armstrong has also recently sold over $100 million of Coinbase stock. He has sold approximately $500 million of his company’s shares over the last year.

Insider sales, which don’t necessarily portend bad expectations — executives tend to sell shares for diversification or simply because they want to plan their personal finances — can pull in investors, it’s true, particularly in turbulent times.

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