- Coinbase stock dropped after the company published its financial results.
- It made a big loss as the crypto winter continued.
- The stock has formed an ascending triangle, pointing to more gains.
Coinbase stock price pulled back by over 4% in extended hours after the company published a relatively weak financial report amid the crypto winter. COIN dropped to $186, down from this week’s high of $208. So, will the crash continue or will it rebound in the near term?
Coinbase Reported Weak Earnings Amid a Crypto Winter
Coinbase, the biggest crypto exchange in the United States, published weak financial results as the crypto winter continued. Its revenue dropped by 21% in the first quarter to $1.4 billion.
Its transaction revenue dropped by 40% to $755 million, while the subscription and services revenue fell by 16% to $583 million. The corporate interest and income fell by 32% to $73 million. Notably, its net loss jumped to $394 million.
This performance was mostly because the crypto industry went through a prolonged downturn in the first quarter, with Bitcoin falling to $60,000 in May. Crypto ETF outflows soared in Q1, which affected its business as it is the biggest custodian in the industry.
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Still, on the positive side, the company is working on some major initiatives to build resilience. At the core of this approach is to become an everything exchange, where customers.
It has now listed hundreds of stocks and launched a prediction marketplace. Data shows that its prediction marketplace made $100 million in annualized revenue, two months after its launch. Also, its derivatives trading volume continued rising, helped by its Deribit buyout.
Coinbase is also becoming a major player in the stablecoin industry, through its partnership with Circle. The company holds nearly $20 billion of USDC, earning and keeping all its interest income.
Looking forward, there are signs that the company’s business is improving as crypto ETF inflows jump. Bitcoin ETFs have added over $1.7 billion in assets this month. Also, Bitcoin and most altcoins have jumped in the past few weeks, with BTC trading at $80,000 today.
The company has also taken actions to lower its costs. It announced a 14% reduction in its workforce this week, a move that will cost it between $50 million and $60 million in costs this year. It also has a strong balance sheet with over $10 billion in cash and equivalents.
Coinbase Stock Price Technical Analysis
The daily chart shows that the COIN stock price dropped after releasing its results and making a big loss. It dropped from a high of $210 to a low of $184 in the extended hours.
Still, this decline may be temporary as the stock has formed a giant ascending triangle pattern, which comprises a horizontal line and an ascending trendline. It has remained above the Supertrend indicator, which is a good sign.
Therefore, the stock will likely bounce back in the coming days, and potentially move above the upper side of the triangle at $213. A move above that level will point to more gains, potentially to the resistance at $300.
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