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Key Insights:
- PayPal stock price has formed a golden cross pattern after soaring by 40% from the year-to-date low.
- The company will publish its second-quarter earnings report on July 31st.
- Traders will focus on its growth amid the ongoing stablecoin growth.
This year, the PayPal stock price has rebounded by over 40% from its lowest point. It coincided with the ongoing US equities surge. This surge could gain steam after it formed a golden cross pattern ahead of its earnings on July 31st.
PayPal Stock Price Golden Cross Has Formed
The daily timeframe showed that the PYPL stock price has been in a strong bull run this year. It has jumped above the 50% Fibonacci Retracement level, confirming the ongoing bull run.
PayPal stock price has formed a highly bullish golden cross pattern as the 50-day and 200-day EMAs crossed each other. The last time that PayPal formed this cross was in August last year, trading at $70. It then surged to $93 a few months later.
PayPal’s share price has also formed a highly bullish inverse head-and-shoulders pattern. This often leads to more upside over time. PYPL stock has also moved above the crucial resistance level at $77.23, the highest point on July 7.
Moving above that level invalidated the double-top pattern, a popular bearish reversal sign. Further, the Relative Strength Index (RSI) has been in a strong uptrend, reaching 63. Moving to that level indicates that the stock is continuing its bullish trend.
PayPal stock price has also moved above the ultimate resistance point of the Murrey Math Lines at $75. Therefore, the most likely scenario is where PayPal continues rising as bulls target the year-to-date high of $93.40. It is up by about 20% above the current level.
A drop below the strong pivot reverse point of the Murrey Math Lines is at $68.75. This will invalidate the bullish outlook. If this happens, the stock could drop to the psychological level of $60.
PayPal Earnings to Spotlight Stablecoin Disruption
The next key catalyst for the PYPL stock price will be its earnings. These are expected to be released on July 31st. These earnings will provide more information on the company’s business as it faces major challenges.
The significant risk of PayPal is the ongoing disruption of stablecoins like USD Coin and Tether (USDT). They have made the cost of transactions lower and the speed faster.
Data compiled by Visa shows that the adjusted stablecoin transactions in the last twelve months jumped to $7.7 trillion. Additionally, the number of active, unique stablecoin addresses has increased to over $279 trillion during the same period.
PayPal has invested in stablecoins through the PayPal USD (PYUSD). It hopes that this will benefit from the recently passed GENIUS Act.
The challenge, however, is that PYUSD is not growing. Indeed, the market capitalization has dropped to $844 million from the all-time high of over $1.02 billion.
In contrast, the recently launched Ripple USD (RLUSD) stablecoin has continued to grow. With this, its market capitalization increased to over $557 Million. Other stablecoins like USDC and USDT have been in a strong growth trajectory.
Analysts expect the upcoming results to show that PayPal’s revenue rose 2.48% in the first quarter to $8.05 billion. They also expect the revenue guidance for the third quarter to be $8.13 billion. It’s a 3.6% increase from the same period last year.
The average PayPal stock forecast by analysts is $82.70, representing a 7.80% increase from the current level. PYPL stock price has been performing strongly since April.
Then, it bottomed following the start of Donald Trump’s tariffs. It has jumped by over 40%. Also, its golden cross pattern suggests further gains after it publishes its earnings on July 31.
These gains will likely happen if the company’s results and guidance are better than expected. It will also jump if the management provides clear guidance on how to grow its stablecoin business.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
