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Nasdaq 100: Coinbase’s share price and Q4 earnings results preview

​​What to expect and how to trade Coinbase’s upcoming Q4 results.

Coinbase Source: Bloomberg

​​​What to expect and how to trade Coinbase’s upcoming Q4 results

Coinbase Global is set to release its fourth quarter (Q4) and full-year 2023 results on 15 February 2024. The Q4 results are for the fiscal quarter ending December 2023.

​What is ‘The Street’s’ expectation for the Q4 2023 results?

Wall Street’s expectations for the upcoming results are as follows:

​Revenue of $823.85 million: +30.95% year on year (YoY)

Earnings per share (EPS): $0.02, (versus -$2.46 in Q4 2022), the first positive EPS since Q4 2021

​Where to next for Coinbase?

​Coinbase Global, the largest cryptocurrency exchange in the United States, is set to report its Q4 and full year 2023 earnings results on Thursday.

​Analysts and investors will be closely monitoring the results for insights into the crypto market conditions during the last few months of 2023 as well as Coinbase's outlook for 2024.

​Last week’s rally in Bitcoin provoked an over 20% rally in Coinbase’s share price from its 2 ½ months low as the company tries to improve its customer retention, maintain subscriptions to its various products and increase its market share.

​Last week the cryptocurrency exchange tried to attract more high-volume traders and boost its institutional business by slashing its fees. The US-based company announced that it will waive fees for 60 days for customers who trade cryptocurrencies on its professional market, provided they have traded more than $500,000 a month on a rival exchange.

​Increased competition from offshore rivals such as OKX and Huobi is part of the reason why Coinbase is adopting a similar strategy to its rivals by offering free trading to attract more users.

​Coinbase's recent push to expand its institutional business comes shortly after the approval of the first bitcoin exchange-traded funds (ETFs) by US regulators. This development is anticipated to have a significant impact on the cryptocurrency trading landscape in the future. The approval of these ETFs is seen as a positive step by crypto enthusiasts, as it is expected to encourage more asset managers to invest in funds that directly focus on Bitcoin.

​Some analysts note Coinbase has a history of outperforming forecasts thanks to crypto market volatility, with rallies such as the one seen last week leading to more trading activity. Also, last year’s cost reduction initiatives, including major layoffs, could further improve Coinbase’s bottom line.

​It is expected that Thursday’s Coinbase Q4 earnings will provide an early glimpse into 2024 performance and an outlook on growth initiatives around areas like institutional services, client retention and profit margins, all of which could lead to a potential recovery in Coinbase’s share price.

​How to trade Coinbase’s results?

​Refinitiv data shows a consensus analyst rating of ‘hold’ for Coinbase with 4 strong buy, 6 buy, 7 hold and 9 sell – and a mean of estimates suggesting a long-term price target of $130.42 for the share, roughly 8% lower than the current price (as of 12 February 2024).

Coinbase analyst Source: Refinitiv
Coinbase analyst Source: Refinitiv

​Technical outlook on the Coinbase share price

​Coinbase’s share price is trying to recover from last week’s 2 ½ months low at $114.51 which was made within its $116.13 to $114.43 support zone, made up of the August 2022 and July 2023 highs.

​Despite the weekly bullish reversal, the Coinbase share price is still trading close to 10% lower than at the beginning of the year, though.

​Coinbase Weekly Candlestick Chart

Coinbase weekly chart Source: TradingView
Coinbase weekly chart Source: TradingView

​The positive relative strength index (RSI) divergence visible on the daily Coinbase share price chart last week warned investors that a bullish reversal may take shape.

​This is exactly what has happened so far with two consecutive gap days to the upside taking the Coinbase share price to the 55-day simple moving average (SMA) at $140.08. It shows how strong the buying pressure currently is.

​Coinbase Daily Candlestick Chart

Coinbase daily chart Source: TradingView
Coinbase daily chart Source: TradingView

​The fact that the Coinbase share price on Friday closed above its mid-pattern double bottom late-January $136.89 high points towards the early January highs around the $161 mark possibly soon being reached.

​For a significant long-term bullish reversal to gain traction, however, the December peak at $187.39 would need to be exceeded.

​The current short-term bullish view will remain valid while no bearish reversal takes the Coinbase share price below last week’s $114.51 low and the $114.43 July 2023 high.

​If such a decline were to happen, the psychological $100 mark and the 200-day SMA at $93.21 would be back in sight.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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