Coinbase Stock Faces Challenges Ahead of Predictions Market Launch

coinbase stock

Summary: Coinbase stock is experiencing significant downward pressure as the company prepares for its predictions market launch. Despite a slight increase in share price, investors remain cautious due to the overall decline in the crypto market and increasing competition. Analysts are closely watching key developments that could impact the company's future.

Key Takeaways:

Coinbase stock rose 1.4% to $252.70, but is still down over 43% from its peak this year.
The market capitalization has decreased significantly, from over $90 billion in July to around $68 billion now.
Analysts expect a 13.87% drop in quarterly revenue estimates, to approximately $1.96 billion.
Coinbase's predictions market launch, in partnership with Kalshi, is seen as a potential catalyst for share price recovery.
The stock has formed a "death cross," indicating potential further declines in price.

Coinbase Stock Price Performance

Coinbase stock saw a modest increase of 1.4% on Tuesday as investors eagerly anticipated the upcoming launch of its predictions market. Currently trading at $252.70, the stock is near its lowest value since December 1st and has decreased by more than 43% from its highest point this year. The company's market capitalization has plummeted from over $90 billion in July to approximately $68 billion today.

The decline in Coinbase shares aligns with a broader downturn in the cryptocurrency market. Bitcoin, which reached a year-to-date high of $126,200, has now fallen to around $85,000. Meanwhile, the total market capitalization for all cryptocurrencies has shrunk from a high of $4.28 trillion to $2.96 trillion.

In general, cryptocurrency exchanges, including Coinbase, experience reduced trading volumes during market downturns. According to data from Yahoo Finance, analysts forecast an average revenue of $1.96 billion for the current quarter, reflecting a 13.87% decrease from the same period last year. Additionally, earnings per share are predicted to fall to $1.06, down from $4.68 in the previous year.

Coinbase faces considerable challenges, particularly from rising competitors such as SoFi, Vanguard, and Charles Schwab, all of which have announced plans to launch their own crypto solutions.

Upcoming Predictions Market Launch

The next major event for Coinbase will be the launch of its predictions market, scheduled for later on Tuesday during the "Coinbase System Update" event. Analysts are optimistic about this development, especially since it will be in collaboration with Kalshi, a leader in the predictions market industry. This sector has seen significant growth, with Kalshi's valuation now exceeding $11 billion. Its primary competitor, Polymarket, has also recently secured funding at a valuation between $11 billion and $15 billion.

Additionally, Coinbase's layer-2 network, Base, is poised to announce a roadmap for the upcoming $BASE token launch, which could pave the way for monetizing its investments.

Technical Analysis of Coinbase Stock Price

coinbase stock
COIN stock chart | Source: crypto.news

Recent technical analysis of Coinbase's stock price reveals that it has been under significant pressure over the past months. The stock has fallen below a crucial support level of $290, which was a pivotal low on August 5 of this year and also served as the neckline in a double-top pattern.

Currently, Coinbase's stock price has formed a "death cross," indicating that the 50-day and 200-day Exponential Moving Averages have intersected. This pattern typically suggests a continued downward trend, with analysts predicting that the stock may target a new low at $231. A further decline below this threshold could lead the stock towards the psychological level of $200.