Coinbase Stock Rebounds as Bitcoin Rally Lifts Crypto Sentiment

Coinbase stock extended its recovery this week as Bitcoin climbed toward $80,000 and crypto-market sentiment improved. COIN has rebounded sharply from its August lows as investors return to crypto-linked equities.

The move has coincided with stronger Bitcoin and altcoin prices. However, Coinbase still faces weaker year-over-year financial results, making sustained crypto trading activity important for the next leg higher.

Crypto Fear and Greed Rises as Bitcoin Nears $80,000

The main reason why the Coinbase stock price is rising is that Bitcoin and most altcoins are in a strong bull run. Bitcoin jumped to nearly $80,000, while the market capitalization of all tokens rose by 6% to $2.57 trillion. Tokens like Ethereum, Ethena, Pump, and XRP.

The rising crypto prices have led to a surge in the Crypto Fear and Greed Index, which has jumped from the year-to-date low of 14 to the current 73. It has moved to the highest level since November 5 last year.

The Fear and Greed Index is one of the most accurate metrics in the crypto industry. It is calculated by looking at key metrics like Bitcoin price action, crypto momentum, social media mentions, and activity in the derivatives market.

A surge in this metric means that Bitcoin and other altcoins may continue the ongoing bullish trend because it is usually a sign that investors are embracing a risk-on sentiment. Such a move would boost the Coinbase stock because it is the biggest crypto exchange in the United States. It also holds vast amounts of crypto assets in its balance sheet.

The main risk, however, is that Bitcoin and other altcoins drop when the index moves to the extreme greed zone.

A sustained Crypto Market Rally Would Benefit COIN Stock

Coinbase stock has been in a freefall in the past few months as Bitcoin and other altcoins plunged. BTC price fell from a high of $126,300 to a low of $57,000 in July. This retreat had a major impact on its business as transactions dropped and as the amount of stablecoins in its platform fell.

The most recent results showed how badly the company is doing, with its revenues and profits tumbling. Its transaction revenue dropped by 22% YoY to $599 million, while its subscription revenue fell by 12% to $555 million. In total, the revenue fell by 19% to $1.2 billion. The company made a $395 million loss during the quarter, which explains why management decided to cut jobs.

Analysts still believe that the company has more downside to go in the long term. The average estimate is that its revenue will drop further in the third quarter. In this, it will drop by 38% to $1.16 billion. This retreat will lead to a sharp drop in its annual revenue to about $5.36 billion.

A surge in crypto prices will lead to more transactions on its platform, which will help it beat the analysts’ estimates. The risk, however, is that this surge is a dead-cat bounce, which may lead to a retreat.

Coinbase Stock Price Technical Analysis

The daily chart shows that the COIN stock bottomed at $137.87, its lowest level in February, June, and August this year. This means that it formed a triple-bottom pattern, which often leads to a rebound.

The stock has now moved above the descending trendline that links its highest swings since April this year. It has moved above the 50-day Exponential Moving Average (EMA), a sign that it is doing well.

Therefore, the stock will likely continue rising in the near term as bulls target the key resistance level of $200. This rally will remain intact only if Bitcoin and other coins continue their upward momentum.

This article is for informational purposes only and does not constitute financial advice. Equity and cryptocurrency markets can experience sharp price movements.