Coinbase Global, Inc (COIN) is preparing to release its fiscal fourth-quarter financial results, and investors are eagerly anticipating the outcome. The stock has been trading higher in anticipation of the event, with a 3.5% increase heading into the announcement.
This comes after Coinbase’s impressive third-quarter revenue beat, which saw the stock rise 1.4% the following day and continue in an upward trend. The company reported revenue of $674 million, surpassing analysts’ estimates of $653.19 million.
For the fourth quarter, analysts are predicting earnings of 2 cents per share on revenues of $823.85 million. Investors will be particularly interested in seeing how much of Coinbase’s revenue was generated through Bitcoin and Ethereum trading, as these cryptocurrencies experienced significant growth during the quarter.
From a technical analysis perspective, Coinbase’s stock appears to be mildly bullish. It is trading in a strong uptrend and potentially setting up a three-gap-up pattern. However, some analysts believe that the stock is due for a pullback.
JPMorgan analyst Kenneth Worthington recently upgraded Coinbase from an Underweight to a Neutral rating. He maintained an $80 price target, suggesting a 51% downside for the stock. Worthington’s decision to upgrade Coinbase may be influenced by the company’s exposure to the Bitcoin ETF wave.
For investors looking to play the potential upside in Coinbase stock with a diversified approach, the AXS 2X Innovation ETF (TARK) could be an option. This actively managed double-leveraged ETF aims to return 200% of the daily performance of the ARK Innovation ETF (ARKK), with Coinbase as the top holding within ARKK. On the other hand, bearish traders can consider the AXS Short Innovation Daily ETF (SARK), which inversely tracks the daily performance of ARKK and its holdings.
In terms of the technical chart, Coinbase recently formed a bull flag pattern and saw two consecutive gap-ups. This suggests the possibility of a third-gap-up pattern in the near future. However, the stock’s relative strength index (RSI) indicates that it is near overbought territory, so a retracement may be expected.
Bearish traders will be watching for a flat or lower close on Thursday’s session, which could result in a bearish doji or shooting star candlestick pattern. If Coinbase experiences a negative reaction to its earnings and falls on Friday, the possibility of a three-gap-up pattern will be negated.
Coinbase faces resistance levels at $177.45 and $187.39, while support can be found at $162.20 and $140.53.
Overall, Coinbase’s fourth-quarter financial results will be closely watched by investors, especially in terms of its revenue from Bitcoin and Ethereum trading. The stock’s technical chart suggests a possible pullback, but the outcome of the earnings release will ultimately determine its future direction.
