COIN Stock Forecast: Coinbase Global Inc continues slump ahead of earnings

• COIN shares have only ended higher in three of 16 trading sessions since debut.
• Q1 earnings on May 13 may offer respite.
• Shares likely heading toward $250 reference price

Wednesday’s hopeful rally was not to be for Coinbase (Nasdaq: COIN). After rising from $276.83 in New York’s mid-morning session to $289.09 around noon, the much-hyped first cryptocurrency exchange to go public had no takers and fell back lower to close at $273. 

Such has been the experience of COIN’s first month on the stock market after its heralded direct listing on April 14. Since trading up to $429.54 on its first day, the stock has been on a downward trajectory ever since.

The consensus of seven analysts is a one-year price target of $481.29, but at the moment shares appear to be aiming for the $250 reference price that Coinbase’s investment banking advisors pointed to ahead of the direct listing.

Tuesday’s news that auction house Sotheby’s had chosen Coinbase Commerce to accept crypto payments at their May 12 auction for the artist Banksy came and went without much effect.

Ethereum rally past $3,000 also has not had any noticeable effect.

Growth maven Cathie Wood’s ARK Invest, which bought up millions of shares in COIN during the first weeks on the Nasdaq, has been quieter of late. As of May 6, the company’s ARK Innovation ETF (ARKK) owns 2,000,798 shares of COIN, its ARK Fintech Innovation ETF (ARKF) owns 169,867 shares, and its Next Generation Internet ETF (ARKW) owns 634,594 shares. These investments combine for a $765.8 million bet on the exchange.

The only upcoming event that might shake investors out of their sloth is Q1 earnings, which will be released after the market close on May 13. The company is expecting between $730 and $800 million in net profit on revenue of $1.8 billion.

COIN price prediction: Nowhere but down

Of the 16 market sessions that COIN has traded thus far, the stock has only closed higher on three occasions. Of course, that is a small sample size.

At the moment, traders should expect the price to settle near the reference price of $250 ahead of earnings. Upward movement could bring the bulls back in if the price exceeds $300, a psychological barrier at the moment.

COIN 4-hour chart

Since April 14, the price has been ricocheting inside a descending channel. On the 4-hour chart, both the 9 and 20 Simple Moving Averages (SMAs) fly well above the current price.

The first barrier any upside action will need to break in order to sustain itself is the upper trend line of the descending channel. At the time of writing, that sits at $289.57.