Coinbase stock price has been experiencing a significant decline, dropping for eight consecutive days. However, one analyst suggests that it could rebound to $295, approximately 40% above its recent opening price.

This decline in Coinbase’s stock coincides with a broader downturn in the cryptocurrency market. Bitcoin, Ethereum, Solana, and other altcoins have faced a harsh reversal, resulting in lower trading volumes across both centralized and decentralized exchanges.

Coinbase Earnings

The stock price has also been influenced by Coinbase’s latest earnings report, which highlighted the benefits of the company’s diversification strategies. Coinbase reported $1.3 billion in net revenue for the second quarter, a significant increase from the $663 million earned in the same period in 2023. However, this figure was lower than the $1.58 billion reported in Q1.

Coinbase’s net income was $36 million, a notable improvement compared to the $97 million loss in the same period a year earlier. These results exceeded both the company’s guidance and analyst estimates.

The company’s efforts to diversify its revenue streams appear to be paying off. Transaction revenue reached $780 million, while subscription and services revenue surged to $599 million. A significant portion of this growth came from custodial fees, which rose to $34.5 million. Coinbase has become the largest custodian for most Bitcoin and Ethereum ETFs, suggesting more stability in this revenue stream as investors typically hold ETFs for extended periods.

Other components of Coinbase’s subscription and services revenue include stablecoin, blockchain rewards, interest and fees, and various other subscriptions.

Analyst Outlook on Coinbase Stock

Many Wall Street analysts are optimistic about COIN stock. The average analyst price target is $265, which is 25% higher than its recent opening price.

Citigroup recently upgraded Coinbase from neutral to buy in July. Analysts from Needham, Goldman Sachs, and JMP Securities are also bullish on the stock. The latest commentary came from HC Wainwright, who adjusted their price target from $315 to $295, implying a 40% potential gain from its current price.

“While it is plausible that we could see crypto asset prices and trading volumes trend sideways in the coming months due to macro related headwinds/uncertainty, we remain bullish on these critically important drivers for Coinbase as we look out over the next 12-18 months, as we enter the next leg of this bull market cycle for crypto,” the analysts wrote.

Technical Analysis

Despite the optimistic outlook, HC Wainwright noted some technical risks. The daily chart shows that Coinbase stock has fallen below the 50-day and 100-day Exponential Moving Averages (EMA), indicating a bearish trend. Additionally, it has formed a slanted double-top pattern with a neckline at $195.02. A drop below this level could signal further downside.

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