Coinbase Stock at Risk as Robinhood Crypto Revenue Drops

Coinbase stock price pulled back this week and this trend may continue after forming the risky double-top pattern. It may also keep falling after Robinhood published a weak financial report, in which it blamed its crypto business. COIN dropped to $194 from this month’s high of $213.

Robinhood Earnings are a Warning to Coinbase

HOOD stock price dropped by over 10% in the extended hours after the company published a weak financial report. While its stocks and options businesses did well, the company blamed the crypto business for the weakness.

Robinhood’s crypto volume stood at $65.7 billion in assets in the first quarter, down from $82.4 billion in the fourth quarter.

The volume jumped from $46.1 billion in the same period last year because of its Bitstamp acquisition. Robinhood’s app crypto volume was $23.8 billion, down from $28.3 billion in the first quarter of last year.

The weak volume was mostly because of the crypto winter, which affected Bitcoin and most altcoins. After peaking at $126,200 in October last year, Bitcoin dropped to below $70,000 in the first quarter. Volumes traded in centralized exchanges plunged by over 40% in this period.

These numbers are raising the possibility that Coinbase will release a weak financial report next week since transactions are the biggest part of its business.

Analysts tracking the company predict that its revenue plunged by 25% in the last quarter to $1.52 billion. The most pessimistic analyst sees the revenue coming in at $1.4 billion.

As a result, the earnings per share (EPS) is also expected to come in at 23 cents, down from 24 cents in the previous quarter. Coinbase has a long history of Missing the analysts estimates, meaning that the real figure may come short of expectations.

Coinbase is Banking on Revenue Diversification

Coinbase has long understood that depending on crypto transactions was a risky move because of the volatility in the industry.

Therefore, the company has sought to diversify its business in the past few years and the results are starting to show.

For example, it recently expanded to the booming prediction market industry through a partnership with Kalshi. This business may become a big one in the future. In its earnings report, Robinhood said that its event contracts rose by 4.4% QoQ to 8.8 billion. These contracts totaled about 0.3 billion in the same quarter last year.

Robinhood has also become one of the biggest names into the stablecoin industry through its partnership with Circle. Its stablecoin business made over $1.3 billion in high-margin revenue last year. It is aiming to attract more USDC and EURC on its platform by betting on agentic commerce.

The company has also expanded to the stock market, which will make it a direct competitor to Robinhood. This approach will help it become an all-in-one financial app and not just a crypto trading platform.

Coinbase Stock Price Technical Analysis

The daily chart is sending a major warning to Coinbase investors ahead of its earnings. Its recent recovery stalled at the 50-day Exponential Moving Average (EMA) level, a sign that investors were skeptical about more gains.

Coinbase has also formed a double-top pattern at $213 and a neckline at $157. This is one of the most bearish reversal patterns in technical analysis. It also reversed at the 23.6% Fibonacci retracement level.

Therefore, the most likely scenario is where the stock continues falling, potentially to the next key target level at $160. On the flip side, a surge above the double-top level at $213 will invalidate the bearish outlook and point to further gains.