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Coinbase (COIN) Sees 7.37% Rise Amid Bullish Trading; Long-Term Outlook Remains Cautious

StockInvest.us, 3 weeks ago

Coinbase Technical Analysis

Coinbase Global, Inc. (COIN) closed at $176.38 on October 11, 2024, a notable increase of 7.37% amidst a bullish session, reaching a high of $179.18. The trading volume of 17.84 million, well above its average of 7.84 million, suggests heightened investor interest. The Relative Strength Index (RSI) of 54 indicates that COIN is neither overbought nor oversold, resting in a neutral zone. The 50-day moving average ($179.05) acts as a potential resistance, as COIN closed slightly below it, whereas the 200-day moving average ($201.73) highlights a long-term bearish trend. The MACD value of 3.65 aligns with short-term bullish momentum, enhancing the possibility of continued upward movement. The Average True Range (ATR) of 5.60 suggests significant volatility, which traders should consider. COIN faces immediate resistance at $179.93 and has a support level around $169.13.

Given these factors, for the next trading day, a narrow movement within the resistance and support levels is anticipated. For the upcoming week, unless significant news catalyzes, COIN might struggle to break past resistance without higher volume support.

Fundamental Analysis

Coinbase Coinbase's market capitalization is $48.79 billion, supported by a Price to Earnings (P/E) ratio of 34.88. With an EPS of $5.63, Coinbase maintains substantial earnings capacity. However, a discounted cash flow (DCF) analysis estimates the stock's intrinsic value at approximately $76.10, implying a significant overvaluation at its current price. Furthermore, the class-action lawsuits against Coinbase by notable law firms could introduce uncertainties and negatively impact investor sentiment. However, the influence of crypto market dynamics, reinforced by Bitcoin's price surge, might offer near-term support to the stock. Analysts have a target consensus of $276, above the current price, reflecting bullish long-term sentiment, although the litigation risk cannot be understated.

Long-Term Investment Potential

Despite the litigation concerns, COIN enjoys a prominent position in the expanding crypto market, making long-term prospects positive if it can navigate legal challenges effectively. The company's capacity to capitalize on crypto's rising popularity will be pivotal. Analysts' consensus of a 'Buy' further underscores potential long-term upsides, although caution is advised given current overvaluation signals from the DCF model.

Overall Evaluation

In conclusion, COIN is classified as a 'Hold' candidate. While short-term volatility driven by legal risks and crypto market performance is anticipated, the overvaluation indicated by fundamental metrics like the DCF suggests caution. Long-term growth potential remains if Coinbase can successfully manage its operational and legal hurdles.

Check full Coinbase forecast and analysis here.