Coinbase fell more than 2% on Thursday amid a two-day losing streak. On Wednesday the stock fell 5%. Is Coinbase stock a buy or sell now?
On MarketSurge charts from Investor's Business Daily, Coinbase stock has undercut its 200-day moving average. Coinbase shares also remain below their 50-day line. Some may be tempted to buy the dip, but investors should examine some key technical indicators.
On March 18, analysts at Bernstein gave the stock a hefty price target of $310 with an outperform rating. The crypto exchange is best positioned to benefit from pro-crypto moves from the Trump administration, analysts noted.
Earlier, Coinbase stock rose amid reports that the crypto exchange was seeking information from the Securities and Exchange Commission on what it spent to conduct investigations of the crypto industry. Coinbase also wants a list of targeted companies and other information about the SEC's crypto enforcement unit.
The action followed news that the SEC may drop a two-year lawsuit claiming that Coinbase should be regulated like a conventional stock. In a post on Twitter/X, the company said "SEC staff have agreed to dismiss their case against us (pending Commission approval)." The commission is expected to vote on it.
The SEC appointed a crypto task force to develop a framework for digital assets. The agency had maintained that most crypto assets are securities and fall under its regulations. But Coinbase had been petitioning for a separate set of crypto rules since 2022.
The smoke has been clearing for other exchanges and trading platforms as well. On Feb. 24, Robinhood, another trading platform for crypto assets, announced that the SEC was dropping a similar lawsuit.
Coinbase reported a strong fourth quarter on Feb. 13. Analysts polled by FactSet estimated sales of $1.8 billion, or a 93% surge, with earnings of $2.11 per share, which would be a 103% increase year over year. Coinbase blew that out of the water when it reported $2.3 billion in sales and earnings of $4.68 per share.
Shares rose above the 50-day moving average but the euphoria was short-lived.
November Elections A 'Monumental Catalyst'
JPMorgan analysts noted the November elections were a "monumental catalyst" for the crypto exchange, while Citi analysts believe the stock will remain a "risk-on play" in 2025.
Citi analysts also believe Coinbase could tap more revenue streams because retail trading volume remains well below 2021 levels. Coinbase could generate revenue through asset tokenization, embedded smart contracts and cross-border payments, but some of these areas await "clearer rules," the analysts noted.
Coinbase's Composite Rating is 68 out of a best-possible 99, while its EPS Rating is 82, according to IBD Stock Checkup.
The stock has started to lag several other stocks in the Investor's Business Daily database, going by its Relative Strength Rating of 20.
Meanwhile, Coinbase's relative strength line, which compares the stock with the benchmark index S&P 500, has trended lower since Dec. 6.
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Coinbase Stock Crashes On DeepSeek News
On Jan. 27, shares of Coinbase crashed 7% amid news that a China artificial intelligence startup DeepSeek offers a far more efficient artificial intelligence training model than its U.S. counterparts.
On Jan. 23, the White House released an executive order with a view to promoting access to public blockchains for mining, validating and self-custody purposes. The order also made a mention of promoting stablecoins that are backed by the U.S. dollar while taking steps to prohibit the use of a Central Bank Digital Currency within the U.S.
Further, Trump also established a President's Working Group on Digital Assets Markets which will provide its proposals for a regulatory framework for digital assets within 180 days.
The Senate also voted to appoint Sen. Cynthia Lummis, R-Wyo., a supporter of cryptocurrencies and a backer of the bitcoin strategic reserve fund, to lead the Banking Subcommittee on Digital Assets.
Trump announced plans for a bitcoin strategic reserve fund back in July during a bitcoin conference, according to reports.
Bitcoin Affects Coinbase Stock Price
The price of bitcoin has affected the stock's performance. Bitcoin touched an all-time high of $108,659 on Jan. 20 as Trump took office. But the digital asset retreated from highs and hovered around $87,000 on Thursday, according to CoinMarketCap. The coin has been hitting resistance at $90,000 since early March.
Meanwhile, analysts at Nexo, a crypto intelligence platform, see a possible retracement to the low $70,000s for bitcoin as investor sentiment remains risk-off.
Coinbase stock had an impressive run in 2024, gaining 43% while the S&P 500 rose just 23%. That performance followed an even more impressive gain in 2023, when the stock rallied 391%. Bitcoin doubled in 2024, and in 2023 it gained 150%. In 2022, bitcoin crashed more than 65% while Coinbase stock suffered an 86% fall.
How Invested In The Stock Market Should You Be Right Now?
Coinbase started in 2012 as a simplified way of trading bitcoin. The stock listed on the Nasdaq in April 2021 at an initial offering price of $250 a share. A direct listing allowed investors to sell the stock directly at the market price. The stock quickly rocketed to an all-time high of 429.54 but crashed, reaching an all-time low of 31.55 in January 2023.
Coinbase is the largest U.S. cryptocurrency exchange and allows trading in several other digital coins. The platform also offers crypto staking, custody and transfer services. Bitcoin and ethereum see the highest volume, but several other coins are also listed and trade on the Coinbase platform. According to its website, Coinbase has $273 billion in assets with a quarterly trading volume of $185 billion.
Mutual funds own 30% of shares outstanding. But not many funds bought the stock over the last 13 weeks, giving it an Accumulation/Distribution Rating of D on a scale of A-E.
Coinbase Undercuts Key Level
Coinbase remains below its 50-day line and undercut its 200-day line in higher volume before trending lower. Its relative strength line on IBD MarketSurge, which compares the stock against the S&P 500, has also been falling. Shares have to retake the 50-day line in higher volume before Coinbase stock becomes a buy again.
Spot Bases And Buy Points With Pattern Recognition
As bitcoin retreats from highs, the stock has come under pressure and it would be better to watch until the stock retakes the 50-day line.
Also, fluid crypto rules and policies can move the stock in ways for which investors must prepare.
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