Coinbase Global Earnings Preview: BTC price rise provides perfect backdrop for COIN Q2 earnings

• Coinbase is set to release Q2 earnings after the market close on Tuesday.
• Wall Street expects EPS of $2.57 on revenue of $1.83 billion.
• COIN stock has just witnessed four days of sharply rising prices in line with Bitcoin.

Alas, Coinbase’s Q2 results missed out on Bitcoin’s renewed vigour of the past few weeks. The pioneer cryptocurrency, which accounted for about 44% of Coinbase’s revenue in 2020, has experienced a 59% run-up since July 20. Coinbase, which reports earnings for the quarter ending in June after Tuesday’s close, is expected to report earnings of $2.57 a share on revenue of $1.83 billion.

COIN stock price and news: BTC powering COIN share price

Shares of the leading US crypto exchange powered up 8.6% to $280.47 on Monday and rose slightly in Tuesday’s premarket. Though some of this was likely traders crowding in with the hope of an earnings pop, much of it was likely due to Bitcoin price rising through the resistance barrier from $43,150 to $45,321. Since BTC made it past this zone, many think $50,000 is the next target. Coinbase’s share price often tracks the price of Bitcoin, because the exchange derives more than 90% of its revenue from trading fees normally paid in crypto. The vast majority of cryptocurrencies have at least some correlation with the leading crypto, which still makes up a large share of Coinbase’s trading revenues.

During Coinbase’s mid-April IPO, the stock briefly spiked to $429.54 before beginning its months-long crash to a low of $208. COIN stock developed a support zone between there and $216.71 over the subsequent two months but could not hold above $255. Last Friday, COIN blasted through the barrier for the first time since mid-May.

The company has spent its first four months as a public company unusually quiet. It has made available FARM, FET and PAX among other tickers to the legion of traders on its platform. Additionally, it completed the sale of $1.25 billion worth of convertible senior notes with a microscopic 0.5% interest rate due 2026. The latter demonstrates Wall Street’s confidence in Coinbase’s financial health. The consensus price target for COIN – $381 – still exceeds the current share price by $100.

COIN stock technical indicators: Everything changes today

Coinbase’s rally in the past four sessions has placed it well above its 9-day and 20-day Simple Moving Averages (SMAs) on the daily chart. The Moving Average Convergence Divergence (MACD) indicator was the first to signal a bullish forecast when it crossed into bullish territory on July 26. The 9-day then crossed the 20-day on August 4, showing confirmation of the initial MACD promise. From here major support is at the 9-day SMA at $246.48.

Monday’s close above $280 falls in line with the close of May 4 and the open of May 14, both red candle days. To retain momentum, it is absolutely necessary that COIN close higher on Tuesday, preferably well above this area of resistance. The next target is $293 and then $303. Above here is only $327.50, a support region from April that may turn into resistance.

COIN 1-day chart