Coinbase stock climbed and rebounded from a key level on Tuesday. The stock is in recovery mode in September after moving sideways and getting turned away at another key moving average in mid-August. After a 19% fall in August, is Coinbase stock a buy now?
Coinbase stock sank on Aug. 5 after the cryptocurrency exchange said it plans to make a private offering of $2.6 billion in convertible senior notes.
The company also completed acquiring crypto options platform Deribit. According to Coinbase, Deribit hit $1 trillion in trading volume last year.
Shares triggered a sell signal on second-quarter earnings on Aug. 1 by falling below their 50-day moving average in heavy volume.
The stock was knocked down after Coinbase posted second-quarter earnings of 12 cents per share, an 89% plunge from the same quarter a year ago. Sales of $1.5 billion rose by 3% but growth decelerated sharply from the first quarter.
Shares had rallied to their all-time high of 444.65 after the House passed the Genius Act and President Donald Trump signed it into law on July 18. The law establishes a regulatory framework for digital coins pegged to the U.S. dollar.
Some may be tempted to buy the stock as it rebounds, but investors should examine key chart features and technical indicators and look for proper buy points.
Coinbase Joins S&P 500
Shares leaped 24% on May 13 following news that Coinbase would be the first cryptocurrency exchange to join the benchmark S&P 500 on May 19.
The company replaced Discover Financial on the index after Discover was purchased by Capital One.
Coinbase in early May delivered an earnings beat for its first quarter, with $1.94 per share vs. analyst views of $1.88. Revenue came in just a little lower than estimates of $2.1 billion.
Shares bounced 17% on April 9 when Trump announced a 90-day pause on tariffs for most countries.
On March 18, analysts at Bernstein gave the stock a hefty price target of $310 with an outperform rating. The crypto exchange is best positioned to benefit from pro-crypto moves from the Trump administration, Bernstein noted.
Earlier, Coinbase stock rose amid reports the cryptocurrency exchange was seeking information from the Securities and Exchange Commission on what it spent to conduct investigations of the crypto industry. Coinbase also wanted a list of targeted companies and other information about the SEC's crypto enforcement unit.
The action followed news the SEC may drop a two-year lawsuit claiming that Coinbase should be regulated like a conventional stock exchange. "SEC staff have agreed to dismiss their case against us (pending Commission approval)," the company said in a Feb. 21 post on X (formerly Twitter).
The stock has been outperforming several others in the Investor's Business Daily database, going by its Relative Strength Rating of 90.
Crypto Task Force Formed
The SEC appointed a crypto task force to develop a framework for digital assets. The agency had maintained that most crypto assets are securities and fall under its regulations. But Coinbase had been petitioning for a separate set of crypto rules since 2022.
The Clarity Act, which passed the House on July 17, will split the authority of overseeing digital assets between the SEC and the Commodity Futures Trading Commission.
Coinbase's Composite Rating is 58 out of a best-possible 99, while its Earnings Per Share Rating is just 10, according to IBD Stock Checkup.
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Coinbase Stock Crashes On DeepSeek News
On Jan. 27, shares of Coinbase crashed 7% amid news that DeepSeek, a Chinese artificial intelligence startup, offered a far more efficient artificial intelligence training model than its U.S. counterparts.
But support for cryptocurrency plays came by way of the White House, which on Jan. 23. released an executive order aimed at promoting access to public blockchains for mining, validating, and self-custody purposes. The order also made mention of promoting stablecoins backed by the U.S. dollar while taking steps to prohibit the use of a Central Bank Digital Currency within the U.S.
The Senate voted to appoint Sen. Cynthia Lummis, R-Wyo., a supporter of cryptocurrencies and a backer of the bitcoin strategic reserve fund, to lead the Banking Subcommittee on Digital Assets.
Bitcoin Affects Coinbase Stock Price
The price of bitcoin has affected the stock's performance.
On Tuesday, the crypto asset hovered above $111,300. The coin has retreated after climbing above $122,000.
Coinbase stock had an strong run in 2024, gaining 43% while the S&P 500 rose 23%. That performance followed an even bigger gain in 2023, when the stock rallied 391%.
Bitcoin doubled in 2024, and gained 150% in 2023. Bitcoin in 2022 crashed more than 65% while Coinbase stock suffered an 86% fall.
How Invested In The Stock Market Should You Be Right Now?
Coinbase started in 2012 as a simplified way of trading bitcoin. The stock listed on the Nasdaq in April 2021 at an initial offering price of $250 a share.
Coinbase is the largest U.S. cryptocurrency exchange and allows trading in several digital coins. The platform also offers crypto staking, custody, and transfer services. Bitcoin and ethereum see the highest volume, but several other digital coins are also listed and trade on the Coinbase platform.
Mutual funds own 37% of Coinbase shares outstanding. Funds have been buying the stock over the last 13 weeks, giving it an Accumulation/Distribution Rating of B+ on a scale of A-to-E.
Coinbase Undercuts Key Level
Coinbase rebounded from its 21-day moving average on Tuesday. But the stock also faces resistance at its 50-day moving average. The stock has to clear that level and build a new base with a buy point before it becomes a buy again.
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