Coinbase (NASDAQ: COIN) stock price has nosedived in the past few months. It has plunged in the past eleven straight days and is trading at $50, which is the lowest level since June 14. The shares have dropped by more than 88% from its all-time high, giving it a market cap of about $12 billion. At its peak, the company was valued at over $73 billion.
FTX crash puts crypto on edge
The biggest technology news this week was the collapse of FTX, the third-biggest crypto exchange in the world. This collapse led to a major crash of most cryptocurrencies and fears of a major contagion in the sector. In a statement, the company said it had no direct exposure to FTX.
FTX’s crash has two main impacts on Coinbase and other exchanges. First, in most cases, Coinbase stock price has a close correlation to cryptocurrency prices. Second, analysts believe that the company’s business could be affected as most crypto investors quit.
Meanwhile, Coinbase published weak results last week. The results showed that revenue crashed by 55% year-on-year to $590 million. Its earnings per share crashed to $2.15 while its net loss dropped to $116 million.
Other metrics were weak as well. The number of monthly transacting users (MTU) declined by 6% to 8.5 million. The only positive data was the 43% increase in its subscription revenue to $211 million. It ended the quarter with $5.6 billion and $483 million in crypto assets combined.
So, is Coinbase a good stock to buy? Most analysts are a bit concerned about the company. Analysts at BTIG, Wedbush, Cowen, and Barclays, decided to lower their target after the company’s earnings.
Therefore, Coinbase share price will likely continue falling as cryptocurrencies like Bitcoin and Ethereum have crashed. The collapse of FTX, which is being seen as a Lehman moment, will not help.
Coinbase stock price forecast
The daily chart shows that the COIN share price has been in a strong bearish trend in the past few days. As it dropped, the stock managed to move below the important support level at $60.31, which was the lowest point since September.
The shares have crashed below the 25-day and 50-day moving averages while the Stochastic Oscillator has moved below the oversold level. The bearish momentum has also continued worsening. Therefore, there is a likelihood that the stock will continue falling as sellers target the next key support at $41.10.