Coinbase Share Price Predictions After FTX Collapse
Coinbase (NASDAQ:COIN) stock price has fallen over the past few months. It has plunged for the past eleven consecutive days and is trading at $50, the lowest level since June 14. The shares have fallen more than 88% from their all-time high, giving it a market capitalization of around $12 billion. At its peak, the company was valued at over $73 billion.
FTX crash puts crypto on edge
The biggest tech news this week was the collapse of FTX, the third largest crypto exchange in the world. This collapse led to a major crash in most cryptocurrencies and fears of major contagion in the sector. In a statement, the company said it had no direct exposure to FTX.
The FTX crash has two main impacts on Coinbase and other exchanges. First, in most cases, Coinbase stock price has a close correlation to cryptocurrency prices. Second, analysts believe that the company’s business could be affected as most crypto investors quit.
Meanwhile, Coinbase posted weak results last week. The results showed revenue fell 55% year-on-year to $590 million. Its earnings per share slumped to $2.15 while its net loss plummeted to $116 million.
Other measures were also weak. The number of monthly transacting users (MTU) decreased by 6% to 8.5 million. The only positive data was the 43% increase in its subscription revenue to $211 million. It ended the quarter with $5.6 billion and $483 million in combined crypto assets.
So is Coinbase a good stock to buy? Most analysts are a bit preoccupied with the company. Analysts at BTIG, Wedbush, Cowen and Barclays decided to lower their target after the company’s earnings.
As a result, Coinbase’s stock price will likely continue to decline as cryptocurrencies like Bitcoin and Ethereum crashed. The collapse of FTX, which is considered a Lehman moment, will not help.
Coinbase Share Price Prediction
The daily chart shows that the COIN stock price has been in a strong downtrend for the past few days. On the drop, the stock managed to break below the important support level at $60.31, which was the lowest point since September.
Stocks tumbled below the 25- and 50-day moving averages, while the Stochastic oscillator broke below the oversold level. The bearish momentum also continued to worsen. Therefore, the stock is likely to continue falling as sellers target the next key support at $41.10.