- Coinbase stock price has been in a strong bearish trend in the past few months.
- This collapse happened as cryptocurrencies plunged this year.
- The stock could get worse before it gets better.
Coinbase stock price has been in a strong bearish trend this year as the crypto industry faces significant headwinds. COIN plunged to a low of $40.45, which was about 65% below the highest level on record. Its market cap has crashed to a low of over $10 billion.
Will COIN recover?
Coinbase is a leading crypto exchange that serves millions of customers internationally. According to CoinMarketCap, the exchange handled over $1.3 billion in the past 24 hours, compared with Binance’s $10.5 billion.
Coinbase stock price has dropped sharply as investors focus on multiple headwinds. The most important headwind is the collapse of cryptocurrencies. Most digital coins have plunged by more than 50% this year while the total market cap of all coins has dropped by over $2 trillion.
Historically, there is a close correlation between Coinbase stock and cryptocurrency prices. Coinbase tends to attract more customers when cryptocurrencies are doing well. At the peak of crypto prices, Coinbase had almost 100 million customers.
Coinbase share price crashed as investors reacted to the collapse of Terra, Terra USD, Voyager Digital, and Celsius. The recent collapse of FTX had a contagion risk to Coinbase for two main reasons. First, it led to a major crash of cryptocurrencies like Bitcoin and Solana.
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Second, it led to a lack of confidence in the crypto market, which pushed more people out of other centralized and decentralized exchanges.
The most recent financial results showed that Coinbase’s revenue dropped to $576 million while its net loss and adjusted EBITDA increased to minus $545 million and $116 million. Its subscription revenue surged by 43% to $211 million.
Therefore, from a fundamental view, the Coinbase stock price will react to the performance of the crypto market in 2023. After having a rough year, there is a likelihood that a reversal will happen in 2023.
Coinbase will likely benefit from the collapse of FTX since it has a strong credibility being an American company that is under strict regulations.
Coinbase stock price prediction 2023
The daily chart shows that the Coinbase share price has been in a strong bearish trend in the past few month. Along the way, the stock has crashed below the 25-day and 50-day moving averages. It has moved slightly above the important support level at $44.50, which was the lowest level on June 30.
The stock has formed a small bearish flag pattern. Therefore, I suspect that the stock will continue falling in the near term and then rebound in 2023 if cryptocurrency prices rebound. The short-term outlook for the stock is at $40.
