Coinbase Stock Price Forecast as Crypto Market Makes Uneasy Recovery

Coinbase stock rose by over 5% in the pre-market session as traders reacted to the ongoing crypto market recovery and the decision by the Office of the Comptroller of the Currency (OCC) granted Circle a national banking charter. It rose to $166, up by 21% from its lowest level this year.

Coinbase Stock Jumps as Crypto Market Stabilizes

COIN shares jumped on Friday as traders focused on the uneasy recovery of the cryptocurrency market. Data shows that the market capitalization of the broader industry jumped to $2.21 trillion, its highest level in over a week.

Bitcoin has led these gains, rising to over $64,320. Ethereum moved to $1,800 today, while other tokens like BNB and Tron have been positive in the last seven days.

Coinbase stock often does well whenever the crypto market is rising because, in most cases, it usually leads to more trading activity on its platform. Crypto traders are more active in bull markets and less active during crypto winters.

Indeed, the upcoming financial results are expected to show that its revenue retreated last quarter. Analysts estimate its revenue dropped 10.4% last quarter to $1.34 billion. It is expected to drop by 18% in the current quarter, with its annual revenue falling by 15% to $6 billion.

Circle Internet Wins National Banking Charter

COIN stock is also rising as Circle Internet wins a National Bank Charter from the OCC. In the aftermath, Circle’s shares jumped by over 13%.

This announcement is important for Coinbase for two main reasons. First, Coinbase is a large investor in Circle, making it a beneficiary as the stock rebounds.

Second, Coinbase has a symbiotic relationship with Circle and is the biggest distributor of the USDC stablecoin. Coinbase holds about 20% of all USDC in circulation and retains the revenue it generates from interest.

Therefore, receiving a national banking charter is likely to enable Circle to continue growing its business, which will benefit Coinbase shares.

Still, there are some risks to this partnership. One of them is that the amount of USDC in circulation has continued falling recently. It dropped from nearly $80 billion earlier this year to $73 billion today. Chances are that some of the decline is happening on Coinbase’s platform.

The other risk is that Coinbase is part of the deal to launch Open USD (OUSD), which aims to challenge USDC. With talks with Circle coming up in August, it is unclear what the outcome will be.

Meanwhile, Coinbase faces some potential catalysts ahead. For example, it recently won a deal to offer stocks and derivatives in the UK. This new license will likely help it continue its growth trajectory over time.

Coinbase, like Robinhood, has expanded to the real-world asset (RWA) tokenization industries by offering tokenized stocks. The goal is to offer more resilient assets rather than the highly volatile cryptocurrencies. It also expanded to the prediction market, which has done well during the World Cup.

COIN Stock Price Technical Analysis

The daily chart shows that the COIN share price has remained under pressure in the past few months. It bottomed at $141.95, its lowest level in February and June this year.

The stock has remained below the 50-day Exponential Moving Average (EMA), a highly bearish sign. It also formed an inverted cup-and-handle pattern and is now in the handle section.

The Relative Strength Index (RSI) has stalled at the neutral level of 50. Therefore, the stock will likely continue falling in the near term, potentially to the key support level of $141. A drop below that level will point to further downside over time.