Coinbase stock flashes death cross ahead of predictions market launch

Coinbase stock price rose by 1.4% on Tuesday as investors waited for the upcoming predictions market launch.

Coinbase shares was trading at $252.70, near its lowest level since Dec. 1, down by over 43% from its highest point this year. Its market capitalization has dropped from over $90 billion in July to $68 billion today.

Coinbase stock has declined sharply in the past few months due to the ongoing crypto market crash that has brought Bitcoin (BTC) from the year-to-date high of $126,200 to the current $85,000. The market capitalization of all coins has dropped from the year-to-date high $4.28 trillion to $2.96 trillion.

Coinbase and other cryptocurrency exchanges often exhibit low trading volume when prices decline. Indeed, data compiled by Yahoo Finance shows that the average revenue estimate for the current quarter will be $1.96 billion, down by 13.87% from the same period last year.

Analysts also expect the company’s earnings per share to come in at $1.06, down from $4.68 in the same quarter last year.

Coinbase is facing major headwinds, including the rising competition from companies like SoFi, Vanguard, and Charles Schwab that have announced plans for crypto solutions launches.

The next key catalyst for the Coinbase share price will be its predictions market launch later on Tuesday at the ‘Coinbase System Update’ event.  Analysts expect the product to be launched in collaboration with Kalshi, the biggest player in the industry.

This launch comes at a time when the predictions industry is booming, which has helped Kalshi’s valuation to jump to over $11 billion. Polymarket, its biggest rival, also raised money at a valuation of between $11 billion and $15 billion.

Meanwhile, Base, the layer-2 network that Coinbase owns, will have a key event, in which it is expected to announce the roadmap for the $BASE token launch. That launch may help the company start to monetize its investment.

Coinbase stock price technical analysis 

The daily timeframe chart shows that the Coinbase share price has come under pressure in the past few months. 

It has already moved below the important support level at $290, its lowest level on August 5 this year. This price was also the neckline of the double-top pattern.

Coinbase stock price has now formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages have crossed each other.

Therefore, the most likely scenario is where the stock continues falling in to next few days, with the next key target being at $231, its lowest level. A drop below that level will point to more downside, potentially to the psychological level at 200.