Shares of Coinbase, a company operating on the recently losing cryptocurrency market, have already lost nearly 90% from their historical highs and are trading at a more than 80% discount from their high-profile debut on NASDAQ in April 2021. JP Morgan analysts have lowered their target price for the company's shares:
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Coinbase decided to cut jobs by almost 18% and laid off 1,100 employees in the face of the 'cryptocurrency winter' that CEO Brian Armstrong himself warned about;
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The company primarily earns money from cryptocurrency trading clients and services in the form of cryptocurrency market custody, loans or the popular 'staking' of cryptocurrencies, which operate under the 'proof of stake' system;
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Coinbase shares have been criticized by JP Morgan analysts, who downgraded their ratings due to weaker earnings forecasts caused by falling cryptocurrencies and declining transaction volume in the digital asset market. The current target price for the stock is 68 USD versus 178 USD previously;
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JP Morgan analysts expect the company's EBITDA to be reduced by 500 million USD, although they still believe in the growth potential of the cryptocurrency market and blockchain technology. Additionally, the bank expects that it may take many years before active investors return to the market, which is confirmed by Ameritrade data from 1999 - 2006;
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It is worth noting that even JP Morgan's current bearish assessment indicates about 30% upside potential for Coinbase shares. Additionally, the behavior of the Bitcoin price shows a number of signs of potential 'bottoming' including record low RSI on monthly, weekly intervals and a break below the 200 session 200MA moving average (near 22,000 USD), which has only happened 3 times so far in 2013, 2018 and 2020. On the other hand, extraordinary economic issues may support the supply side;
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Despite weak sentiment from economies and record inflation, a survey conducted by Bank of America analysts indicates that over 90% of over 1013 respondents intend to buy into the cryptocurrency market over the next half of the year.
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Coinbase (COIN.US) stock, D1 interval. The company's shares have been moving in a downward trend since the day of their debut. Recently, we can see a potential double-bottom formation near 50 USD, which can be the basis for a potential rebound. The closest resistance level according to Fibonacci is the retracement at 132 USD, which is the first serious resistance. The company's valuation strongly correlates with the cryptocurrency market and the Bitcoin price. In case of further declines in the crypto sector, a downward movement remains unlikely. The pre-market price indicates an opening near 52 USD. Source: xStation 5
