Can the Coinbase Stock Revisit $400 as Wall Street Pros Expect?

Coinbase stock price has been in a freefall this month, mirroring the performance in the crypto industry. It crashed to a low of $260, its lowest level since June this year. It has fallen by over 41%, bringing its market capitalization to $70 billion from $90 billion earlier this year.

This article explores whether the COIN stock will rebound and hit $400 as Wall Street pros expect.

Wall Street Analysts are Upbeat About Coinbase Stock

Most Wall Street analysts tracking Coinbase believe that the stock will bounce back once the ongoing crypto market crash ends.

Data compiled by TipRanks shows that 21 analysts have delivered their COIN stock price forecasts in the last three months.

Fifteen of these analysts have a buy rating, while five have a hold rating. Only one analyst, Ed Engel of Compass Point, has a sell rating, which has worked out well. In October, he lowered his target from $277 to $266.

The most optimistic Wall Street analyst is Gautam Chhugani of Bernstein, who believes that the Coinbase stock price will jump to $510, up by 95% from the current $262. Andrew Harte, a BTIG analyst, believes that the stock will jump by 60% to $420. Other analysts who are highly bullish on the company are from JPMorgan, Benchmark, and Rosenblatt.

These analysts believe that the company has a strong market share and numerous catalysts that will drive it higher in the long term.

Coinbase Faces Major Headwinds

Coinbase stock price faces some major headwinds. First, the most recent results showed that its business was not growing as fast as it had in the past. These numbers showed that its transaction revenue rose from $764 million in the second quarter to $1.04 billion.

Coinbase’s net revenue, which also includes its subscription and services revenue, rose to $1.79 billion from the previous $1.9 billion. This revenue growth was likely because of its acquisition of Deribit.

Second, there is a risk that the company’s business will continue slowing now that the crypto market crash is happening. Bitcoin price has moved from a record high of $126,300 in October to $90,000 today. Other altcoins have done much worse. The total market cap of all coins has dropped by over $1.2 trillion.

Coinbase generates most of its revenue by facilitating transactions in the spot and futures markets. Recent data shows that volume in the spot market and the futures open interest have dived, meaning that its revenue growth will decelerate.

The average estimate among 22 Wall Street analysts is that its fourth-quarter revenue will drop by 13.75% to $1.96 billion. Most importantly, analysts expect that its earnings per share (EPS) will move from $4.68 in Q4’24 to $1.19 in Q4’25.

The other potential risk is that it is a highly overvalued company. Seeking Alpha data indicate that the company has a forward P/E ratio of 32, which is higher than the sector median of 10.

Coinbase Stock Price Technical Analysis

The daily timeframe chart shows that the COIN stock price has been under pressure in the past few weeks, moving from a high of $400 in October to $260 today.

It has plunged below the important support level at $290, its lowest level in August and September, confirming a bearish breakdown.

The stock has moved below the 50-day and 200-day Exponential Moving Averages (EMA) and could soon form the risky death cross pattern, one of the riskiest signs in technical analysis.

The downtrend is continuing to gain momentum as the Average Directional Index (ADX) jumped to 22. Also, the Relative Strength Index (RSI) is approaching the oversold level.

Therefore, the stock will likely continue falling as sellers target the next key support level at $235, its lowest level in June. A move below that level will point to more downside, potentially to $200.